excellent research - which underlines how hopelessly wrong PS's rosey poland forecasts were in late 2007.

Hi Dan W

I think that's a fairly glib response, actually.

Housing markets are cyclical. Of course, supply will catch up with demand at a point and price growth will then slow, stop or even fall back. Supply then eases in response and demand catches up - as this article points out is happening. This is what happens in a market in which the fundamentals indicate demand is out there. This is what happened in Czech, for example. The pattern is being repeated in Poland.

The important thing is to ask whether the long term trend would indicate growth in a market when the cyclical factors are taken out.

And, as this article points out, in Poland's case the answer is that the lights are very much on green. We see buying opportunities coming along in the fairly near future. But the key is to see growth and returns as averages over the long term, not in short bursts - up or down - as the market irons out cyclical factors.

cheers

didn't mean to be glib, robin. and my congratulations on the article are sincere - it's good work, and gives a feel for what's really going on in poland right now.

i am familiar with the theory of cyclical supply and demand you refer to, as i imagine most PS investors will be. my complaint was to do with several PS 'conservative predictions' of 20%+ price growth in polish markets in 2008, made as late as the second half of 2007. these must have helped earn a few 'finder's fees' from PS, as it sold a lot of polish property, which i hope and trust didn't influence the predictions. haven't seen any sort of explanation or apology for getting it so wrong, merely instructions to us to look to the long term.

returning to economic theory, john maynard keynes had a nice line about the long term, pointing out that we would all be dead then. do be careful with the trust of your clients at PS, as it's a difficult asset to replace. ask anyone in investment banking.

regards,
dan

Hi Dan

Yes,good point - Mr Maynard Keynes was right. But then he was an economist not an investor. And unlike him we've always talked about the long-term as a ten year horizon. We advise aiming for that and planning for it, but, of course, that doesn't mean you HAVE to hold for that period. We would certainly never advise anyone to invest on the basis of a forecast of growth over the next year alone.
But, most importantly, don't you agree that Poland offers superb growth potential in the long term (as defined above rather than up to the point when we're all dead)? Surely, this is the point that matters when you strip out cycles?

Cheers

Robin

Robin,

I think your response also veers towards being glib. PSs forecasts in relation to Poland over the past 2 or 3 years haven't shown any great market insight. In summary these were:

2006 - 10 years of consistant growth, archic planning system and huge shortfall in the number of homes being built means there is no prospect of oversupply

late 2007 - brief pause in growth before second phase growth

2008 - large oversupply, prices falling back 5-15%

2009 - ????

While of course there are no guarantees in this business, I think it is reasonable to expect that when PS provide updates to refer back to earlier predictions and where necessary to explain any changes in outlook.

Regards

Alan

Hi Alan

Fair points. And if I seemed glib, then my apologies to all.

I suppose the point I should have made was that we have indeed re-visited our view of this market and I think very honestly reviewed the way it was and is developing. Circumstances do of course change and forecasts with them - and, as you rightly say, we must go back and examine these changes.

But can I draw your attention to a few articles in which we did re-look at the Polish market and review in some detail how things were panning out, including the negatives – and one of these is from 2007.

Cheers


http: / /www .propertysecrets .net /article /taking _a _break _p1 _polish _property _prices _growth _is _slowing _and _rents _are _on _the _risewhats _the _best _strategy _for _investors /1874 .html

http: / /www .propertysecrets .net /article /taking _a _break _p2 _as _polish _property _price _growth _eases _whats _the _strategy _for _success /1879 .html

http: / /www .propertysecrets .net /article /polish _property _investment _the _state _of _the _market _now _and _whats _coming /1955 .html

http: / /www .propertysecrets .net /article /property _secrets _investors _earn _stunning _poland _property _profits /2017 .html