EU Cards in Czech Republic

We have long been the cheapest provider on the market aiding foreigner property investors to get EU cards in the Czech Republic.

However, is soon expected (ie early 2009) that the Czech Republic, after a 5 year grace period, will comply with the EU regulations and remove the necessity for foreigners to obtain an EU card or set up a company to be able to buy property in the Czech Republic.

This will mean even cheaper transaction costs and less hassle when buying property in the Czech Republic, hence it is a good thing.

The restrictions on foreigners owning Czech agricultural land will remain place for another 2 years however.

Theoretically, if the restrictions are scrapped, only foreign property investors completely on off-plan units in the next few months will need an EU card. If you find yourself in this position please contact us for more information.

www.propertyinvestmentinternational.com

Which countries in Central & Eastern Europe could be most affected by the Credit Crisis

Iceland's economic and banking woes have been splashed all across the news in the last couple of weeks, and quite rightly too as the situation is a mess (but a great/cheap opportunity to travel there as their currency has been hammered).

In light of the crisis in Iceland I thought I'd take a look at which countries in Central and Eastern Europe are the most at risk in going the same way, and thus which property markets you may want to avoid.

Starting with the worst first, in order:
1. The Baltics (Estonia, Latvia and Lithuania)
2. Hungary
3. Romania
4. Bulgaria

The Baltics in particular have had a huge property bubble that has been busting for a while now, the banks have tried to tighten up lending but they've been a little late and their actions have only speeded up the demise of the housing market. These are small and vunerable economies that have grown too quickly over the last 5 years and have not done enough to temper and sustain some of this growth.

Hungary has been a mess for a while, their economy just never did perform as well as some of their neighbours and the political malaise does not help. The Hungarian property market has not even seen some of the price growth that the Baltics countries have, and has poor mortgage finance for foreigners. Much of the nations mortgage borrowing has been in Swiss Francs leading to huge currency risks that could see people unable to afford their repayments if the exchange swing against them. Only recently has the Hungary started to impose restricts on this kind of lending, again too late.

Romania is another candidate for an economic mess. High, but unsustainable, growth and wild policies by the government that has tried to grow the economy too quickly. This has led to huge risks that the economy could falter. Mortgage lending to foreigners has never been very good and now has been stopped by the national bank pending a review. Romania is not a place I'd want to invest at the moment.

Bulgaria follows similar lines to Romania, though perhaps not as accute. Though their banks have only just recently started to tighten up their lending practices on the heavily over-inflated priced property on the beach and in the ski resorts. Time will tell as to how their banking sector will fair.

The other country I might mention in this list would be Ukraine, whilst not in the EU there are still similar banking and property sector risks as described above.

The Czech Republic, Poland and Slovakia should fair a lot better. Although I see their economic growth rates slowing, both their economies and property markets are more robust.

The world is definitely changing and no-one really knows how things will develop over the next year, but one thing is for sure now is a good time to have money in safe solid assets and cash ready for the opportunities that will abound when the world once again settles down.

www.propertyinvestmentinternational.com

Nigerian property and land

The Nigerian property market is not something I normally write about, but as I try to keep my eye on as many of the world's property markets as possible I thought it would worth mentioning some interesting facts about whats taking place in the Nigerian property market.

A land reform act passed in 1978 gives the Nigerian government ultimate ownership and thus control over most of the countries land.

Under this act the Nigerian government owns almost 95% of the nations land, with much of the remaining 5% being untitled.

The population of Nigeria is around 140 million people, a figure which is expected to double by 2050.

In the capital, Lagos, the population is expected to increase from the current 15 million to 23 million people in only the next 5 years!

With such huge increases in population demand for property and land is very high in Nigeria and is on the increase.

With such demand for land there is unfortunately a huge abuse of power taking place, as it does in many countries but particularly in Africa.

People who have invested their life savings and work into building their own home are now seeing them being ripped down by the government. Huge swathes of the city are being cleared to make way for new developments.

The government is selling the land at a huge profits to developers. These developers then build new homes, many of which are priced in the million dollar plus range, and also make huge profits.

Whilst this is good business for the government and developers is a human rights tragedy.

Reforms of the land laws and the introduction of western style mortgages have been expected for sometime but are slow to materialise.

In the short term things are unlikely to get better. Demand for housing and land is only going to increase as is the greed of those in power.

The rental market similarly has huge demand, often tenants need to be able to come up with 3 years rent in advance just to rent a home.

I'm a big fan of investing in cities with increasing populations (though particularly in more developed nations) and with the demographic changes taking place in Nigeria it could be a great place to invest if one can get secure title on the land and has family connections in the country.

That said, I feel the Nigeria is a little risky for me and I'll concentrate more on my day job of Central and Eastern European property.

www.propertyinvestmentinternational.com

Czech vs UK property shows

Exactly two of weeks ago I attended a property exhibition here in Prague called ForArch.

The ForArch exhition was a combination of property for sale, furniture, kitchens, fires, building materials and so on, and took place in the new exhibition halls in Letnany, Prague, where there is a new stop on the metro line C.

What really struck me was not that it was slightly different from a UK property show but that the place was absolutely packed full of people (and this was on a Friday morning!). It was so busy it was almost annoying.

This is in sharp contrast to the recent property shows in the UK which have either been cancelled or, like this years Property Investor Show, a complete disaster due to such a low turn out.

I'm not suggesting you should invest in a certain market just because how busy their respective property shows are but it does give an interesting indication of the relative demand for property today in the two countries.

www.propertyinvestmentinternational.com

Romania mortgages warning for foreigners

Yesterday I heard rumours that due to the world credit crisis and Romania's own rapid credit expansion the Romanian national bank is tightening up on the ability for Romania's bank to lend to foreigners.

It seems that Bancpost has already "temporarily" (read indefinitely) suspended giving mortgage loans to foreigners.

This is a devastating blow for those looking to a get a mortgage in Romania as Bancpost are (were) currently one of the largest providers.

I have long been very cautious about investing in Romania, especially with so much hype and speculation having taken place there over the last couple of years, and this just furthers my hesistance to invest there.

Mortgage finance has always been very difficult to obtain in Romania for foreigners and even when one does get it the terms are not good at all (ie max 75% LTV and high 7-8%+ interest rates).

Prices are now either stagnant or falling in many Romanian cities after the unsustainable boom and the rental market is shaky at best.

Medium term the market has a lot of potential, but for now I would still not invest my own money in Romania what with high risks, falling prices and poor mortgage finance.

Given the situation of the world economy at the moment I don't see many more Romanian banks jumping over themselves to lend to "risky" foreigners, especially at a time when prices are falling.

Quite the opposite in fact ... I see the ability for foreigners to get mortgages in Romania being very difficult for quite some time to come - despite all the promises I've seen from various companies over the last couple of years.

Romania is a classic specualtive market - where the risks are high and uncertain but the potential rewards good - but now with further restrictions on mortgages in Romania many investors are going to have an increasingly difficult time making their investments turn into something profitable.

www.propertyinvestmentinternational.com