Hi [name]
Hope you are well!
This week we ask Antony Tilney to give us the latest on the Polish market, speak to Andras Patkai on Bratislava Finance Incentive and discuss what a hung parliament will mean for the pound!
Have Polish Residential prices bottomed out?
I thought this would be a good opportunity to update on what the team have been working on in Poland over the last 6 months.
We have worked hard to ensure we have the best possible team on the ground and in the UK supporting all completions, fit outs and ongoing management and support for re-sales here (including legals).
We recognised the best way to do this was by having an experienced investor who understood both the investing world and the Polish markets to coordinate this and we were delighted to have been able to persuade Antony Tilney to take up this role.
Many of you will know Antony, certainly if you are investing in Poland you will do....his bio is here
If you need to discuss anything with Antony contact him here
How is the market?
Like many markets it is very hard to generalise, some areas have done better than others but certainly prices have softened over the last two years throughout Poland.
"In successive quarters (during 2009), price reductions have gradually decreased and in Q4 2009 the average price of units launched for sale increased for the first time. Increasing sales levels, significantly higher number of residential units launched to the market and stabilizing prices allow us to assume that we are witnessing a change in trend and the beginning of a prosperity period." (source: REAS)
Prices for Residential units at the end of 2009 where roughly back to the beginning of 2007 price levels, but with the first rise in prices during Q4 2009 we may be entering a new phase of the market cycle, where demand will exceed supply again.
For investors who bought earlier in the property cycle, in 2005 and 2006 when the markets were very strong, there are still significant gains achievable, despite the more recent falls in the market.
A great example of this is at Future City, Krakow where we have successfully coordinate several re-sales to local owner occupiers with investors seeing total returns of around 70-80% on their initial purchase price allowing for an exchange rate gain of around 25% as you can see from the table below.
Actual sales achieved over the last few months in the Future City development, Krakow.
| Unit Type | Size SQM | Approx Purchase price PLN (incl VAT, parking & final finish)* | Purchase price PLN calculated per SQM | Selling price PLN (incl VAT, parking & final finish) | Selling price PLN per SQM | Profit % (before selling costs) | Exchange rate gain 5.8 : 1 >> 4.5 : 1 PLN:GBP
** | Total profit |
| 1 bed |
57 |
280,750 |
4925 |
430,000 |
7543 |
53% |
25% |
78% |
| 1 bed |
57 |
271,320 |
4500 |
410,000 |
7192 |
51% |
25% |
76% |
| 1 bed |
52 |
245,700 |
4725 |
393,300 |
7563 |
60% |
25% |
85% |
| 1 bed |
51 |
243,008 |
4725 |
380,000 |
7450 |
56% |
25% |
81% |
| 1 bed |
51 |
243,008 |
4725 |
395,000 |
7745 |
62% |
25% |
87% |
| 1 bed |
62 |
285,634 |
4607 |
420,000 |
6774 |
47% |
25% |
72% |
*Based on figures from Phase 1 launch
**presumes unit bought for cash, effects will be reduced if mortgaged
Information provided by Antony Tilney.
So some positives here, and with I firmly believe the strongest team available on the ground to all Property Secrets clients we should continue to be able to provide the most uptodate and accurate information on the local markets to ensure we can help maximise returns here.
Any further questions you can Ask our Expert on Poland Antony Tilney by clicking here and submitting your question.
Please Note: Following recent tragic events at Smolensk, where President Lech Kaczynski and his wife Maria were killed, along with a number of other senior Polish political, military and cultural figures, when their plane crashed as it prepared to land in western Russia on Saturday 10 April 2010, Poland has moved fast to replace most of the top officials who died in the plane crash - from the army chief of staff to the president of the national bank. Despite the obvious distress, there has been little or no economic fallout as a result of this terrible tragedy.
Bratislava Finance Incentive
As opposed to the situation in the neighboring countries, mortgage conditions have improved over the past 6 months in euro-zone Slovakia. Banks are offering government-subsidized mortgage products, preferential interest rates, discounted fees, "mortgage within 24 hours," attractive re-financing options, and gifts like an LCD TV. The result is a lively property market. 100% LTV mortgages are also back. However, financing is no longer so cheap because of the high risk margins of the banks, who can afford high risk margins because the ECB interest rates are low. Click here for more.
What will a hung parliament mean for the Pound?
Volcanic ash-clouds, alleged banking corruption and a live political battle; the past seven days have been an all too perfect example of world events manipulating currency markets.
As day upon ash-sodden day the European airline crisis has deepened; a further cloud was cast over global economies by the Goldman Sachs investigation. The Pound’s own weakness has been somewhat masked by the fact that fears surrounding the Greek rescue plan have continued to simmer, keeping the Euro in a similarly weakened state. Read more here
Remember you can get a FREE Currency Solutions guide to learn "How to control your currency as the market moves in 2010 by clicking here
Have a great week!
Daniel.
