Friday, August 31, 2007

Property and the Schengen Effect

I remember walking around an overseas property exhibition in London in 2003 listening to everyone selling property in Eastern European talking excitedly about ‘The Dublin Effect’. This was not long after it was announced that the eight major Eastern European countries were going to be joining the EU on 1 May, 2004.

The agent’s point was that, as a result of joining the EU, Ireland had gone from being one of the poorest countries in Europe to being one of the richest, and property prices in Dublin had gone through the roof as a result. Surely the same thing was going to happen in the capital cities of the new Eastern European entrants as well?

With hindsight, these agents weren’t exactly wrong, but they weren’t exactly right either.

Prices did go up for sure, and anyone buying property in Prague or Budapest, for example, would have made a tidy profit if they had got into the market at that time. However, the reason was different from the promised ‘Dublin Effect’.

The reason why property prices went up so fast in 2003 and 2004 was very close to the old Wall Street proverb of ‘buy on the rumour, sell on the news’. It was the speculative buying frenzy before EU accession that led to the gains, not as a result of great economic improvements afterwards. In fact prices in Prague and Budapest plateaued shortly after accession.

This shouldn’t have been too much of a surprise to anyone who thought about the situation logically. Ireland was a tiny country compared to the size of the EU as a whole. Just a small part of the EU budget going into Ireland was able to make a huge difference. But when the ten new members of the EU joined all at once, adding a population of 70 million to the EU compared to Ireland’s 4 million, it should have been obvious that the effects upon each of the Eastern European countries were going to be substantially diluted, although certainly highly beneficial in the long-term.

The next EU related factor that the sales agents are getting excited about is entry into the Euro, a feat that only Slovenia has managed to achieve so far. Despite agents’ best efforts, Slovenia’s adopting the Euro on 1 January 2007 doesn’t seem to have had a huge effect upon property prices, probably due to the fact that prices there are already pretty expensive.

Next is the turn of Malta and Cyprus to join the Eurozone on 1 January 2008 which, again, the agents are making a big song and a dance about.

However, there’s another big change in Eastern Europe happening on 1 January 2008 which no one really seems to be talking about so much, yet which I personally believe could have a bigger impact upon some property prices than Euro entry. This is the enlargement of the Schengen zone to include Lithuania, Poland, the Czech Republic and Slovakia.

The what?

The Schengen area constitutes a border-free travel zone within the EU among the old member states, with the exception of Great Britain and Ireland. Non-EU countries, such as Norway, Iceland and Switzerland are also included in the Schengen zone.

Currently, whenever you cross the border from one Eastern European country to the next, or from any of them into Western Europe, you need to go through passport control. Not really a major problem on long journeys, but not something that you want to go through on a regular basis, week in, week out, on shorter journeys.

From 1 January 2008, all this will be changed, and the only notification that you are leaving one country and entering another will be the ‘Welcome to …’ signs.

So how could this affect property prices?

Across most of the region, the answer is probably not a huge amount:

Lithuania: Faster entry into Poland. Not so much difference in property prices either side of the border. So probably not so much difference.

Poland: Easier access into Germany. But it’s Eastern Germany, which is not where the money is. So again, probably not a major factor.

Czech Republic: The southwest of the country borders the rich Bavaria area of Germany. The problem is that the areas on both sides of the borders are mountainous and depopulated. Nuremburg is 65 miles from the border; Munich is over 100, so it’s not really commutable. Maybe there will be a few more Bavarians who would be interested in summer cottages in the border regions, but a round trip of this length takes such a time that the time savings by not having to stop at the border are fairly insignificant.

The situation on the Czech Republic’s southern border with Austria is quite similar – mountainous and depopulated for the main. The South Eastern corner of the country might see some slight gains. Breclav, for example, is 45 miles from Vienna and has a direct rail route, so it could be interesting. The Czech Republic’s number two city of Brno is a bit further away – 70 miles. That’s pushing it a bit for a daily commute though.

Which leaves one big winner from the Schengen entry and that is … Slovakia!

Or, more precisely, its capital, Bratislava.

Discounting the Vatican City, Bratislava and Vienna must be Europe’s two closest capital cities, if not the World’s. Just 35 miles separates the two city centres. That’s nothing at all – about the same as Reading or Dunstable is from London’s West End (and the traffic certainly is nowhere near as bad).

In terms of property prices though, the two cities are worlds apart. Prime city centre property in Vienna is currently going for EUR3500. The best new developments in Bratislava are exactly 50% of that – at EUR1750.

I just can’t see that this situation is going to last forever. Sooner or later, prices in Bratislava are going to start catching up with Vienna (which looks far from overpriced itself and is showing steady growth). Once it gets more easy to commute from Bratislava to Vienna, more Slovaks are going to start working there earning a much higher salary than they would be able to do so in Bratislava, and they will start using that money to start buying decent apartments back home.

Conversely, poorer Austrians could decide that they would get a lot more for their money in Bratislava (although this is less likely due to the fact that not many Austrians speak Slovak, whereas many educated Slovaks will speak German).

Even without entering the Schengen zone, all of Bratislava’s prospects were looking great already, with Slovakia’s low taxes attracting a lot of inward investment into the country such as Kia, leading the country to be dubbed ‘the Tatran Tiger’. Add to this the fact that prices are still among the cheapest in Europe, that rental yields are among the highest in Europe and that Slovakia is currently on schedule to adopt the Euro in 2009 and it’s hard to find a single negative about the city.

Click here for a more detailed look at the current state of the Slovak property market.

For the best potential, look for high-quality developments on the west side of the Danube – the closest side to Vienna, and I’m pretty sure that you’re on to a property with some of the best potential for growth in Europe at the moment.

Sunday, August 26, 2007

Property and ‘The Tipping Point’

In my last entry, I warned of the dangers of ‘following the herd’ and ignoring common sense for the sole reason that ‘everyone else thinks it’s a good idea’ because you risk getting into a market just as everyone else decides that it’s about time to get out.

So getting into a property market too late is definitely a bad thing to do. But is there a danger at the opposite end of a spectrum? Is it possible to get into a market too early?

These thoughts have been on my mind for the past few days because Albania has been on my mind. It first came on the agenda because my girlfriend is looking for a new job. She started as a real estate agent in Latvia in April, which proved to be very unlucky timing for her as it exactly coincided with the downturn in the market – the result being that very little property is moving in Riga at the moment, so she’s not earning any commission.

I told her in May that I thought that she should get involved in selling overseas property in Latvia. As was the case in the UK ten years ago, Latvians now realize that there is good money to be made in buying property in an emerging market and, if there aren’t any gains to be made at home, then it’s time to look elsewhere to catch the next wave.

She wasn’t convinced at that time that it was a good idea but, sure enough, there has been a large number of companies established here that have started selling overseas property to rich Latvians. Many of them are selling the same Bulgarian properties on the Black Sea that the Brits are getting a bit wise to the problems of.

But anyway, she has an interview on Monday with a company selling property not only in Bulgaria but also in Montenegro (now that’s better!) and, interestingly, Albania.

The same day, I saw some articles that were based on a press release from UK developer Barrasford & Bird publicizing a new development that they’re promoting in Albania.

I haven’t done a lot of research into the market in Albania to date because I considered it too small and undeveloped to be viable yet, but I began to ask myself whether now was the right time to start looking at it or is it still too early?

Perhaps like you, I have been constantly kicking myself for not having bought in markets earlier. “If only I’d bought in Montenegro last year,” I sigh or, “prices in Sharm el-Sheikh are up 20% already this year – I should have bought there in December.”

But what if I’d bought in Montenegro or Sharm el-Sheikh five years ago? What would have happened is that I would have seen the value of my investment hardly increase at all for the first four years of that period. I would have been a lot better off investing in Bulgaria or Latvia.

So what influences the timings? One of the most influential books over the past few years has been Malcolm Gladwell’s ‘The Tipping Point – How Little Things Can Make a Big Difference’. In it, he talks about “social epidemics”, or sudden and often chaotic changes from one state to another. In all of the examples he gives, changes do not happen steadily or regularly – there is a sudden breakout, which is better explained by the graph below:
Take the Internet as an example, once again. For several years, the only people using it were a bunch of academics and computer geeks. Then, in the mid-Nineties, everyone suddenly discovered it and, within just a few years, everyone was online.

So why do these changes suddenly occur? If you’d really like to know, read the book, or a synopsis of it here.

Looking at the graph, it’s easy to see that the same curve can be applied to all of the other property hotspots in the past, so it’s almost inevitable that it will happen in territories like Albania as well. The only question is: how far along the curve is Albania at the moment?

The other factor affecting property prices is the basic economics of supply and demand once again. Prices are only going to start skyrocketing if demand substantially exceeds supply.

Is that really the case in Albania today? Probably not. Not yet, at least, but it is sure to come. The trick is to predict exactly when. Ideally you want to get in just before other people start talking about it. The fact that I’m talking about it here and you’re reading about it shows that the process is already starting.

Albania’s big plus point is that it is the last remaining piece of the European Mediterranean to be discovered. If you want some beachfront property in Europe for under EUR1000/m2, Albania is your last chance of getting some.

On the downside, however, Albania was, by far, the most screwed up country in Eastern Europe and there is a hell of a lot of work to do to bring it up to European standards. There’s also traditionally been a lot of organized crime in the country which the government is struggling to tackle.

But let’s go back to supply and demand for a moment. In order for there to be strong demand, someone is going to need to occupy the properties – the economics of jet-to-let simply don’t work if a property lies empty. So who is going to be living in these new apartments?

Local Albanians? No chance – the only people with money in Albania at the moment are the mafia dons, and they’ll be buying their own palaces for sure – not renting 60m2 off you!

Ex-Pats? Doesn’t really have all of the comforts of home, does it? I think that even the most adventurous of souls would think twice about moving from Basingstoke to Vlore just yet.

Tourists? Do you know anyone who’s been on holiday to Albania yet? Or anyone who’s considering it? I didn’t think so. There isn’t really any tourism infrastructure in place in the country yet – most important of which are charter flights into the country, let alone some decent hotels in order to accommodate them once they are there.

“But what about Bulgaria and Montenegro?” you may ask. “Their tourism industry grew very fast.”

This is true, but you need to remember that Bulgaria and Montenegro were major holiday destinations for Eastern Europeans all through the years of Communist rule, so they didn’t need to build a tourist industry from scratch – they just needed to bring it up to Western European standards.

In summary, although such cheap prices for beachfront property do seem very attractive, I don’t think that they will see the same rapid growth as Montenegro and Bulgaria has witnessed until the Albanian Tourist Board is able to start attracting tourists to the country in significant numbers. Personally my strategy at the moment will probably be to buy in Egypt, keep the property for two or three years and then the time might be right for Albania.

Wednesday, August 8, 2007

The Herd Mentality

I spent much of 1999 watching Internet stocks exploding in value, seeing how everyone else seemed to be making vast quantities of money.

“But this just doesn’t make sense,” I spent 1999 telling myself. “There’s just no way that these unprofitable companies are ever going to make enough money to justify the kind of money that they are currently valued at.”

And so I sat back and waited to see what would happen.

By the start of 2000 though, I started to doubt what seemed to be common sense to me. I was no investment expert and everyone else who (theoretically – highly theoretically) knew what they were doing were leaping in and getting rich, rich, rich.

So on 1 March, 2000, I leapt into the market investing a big chunk of my savings. For the first week I saw some nice gains and was feeling very smug.

Then, on 10 March 2000, the bubble burst and I ended up losing 75% of the money I had invested in just a couple of weeks before I decided to cut my losses and run.

It was a good – but very expensive – lesson in the mentality of following the herd. I vowed that I would never again let other people sway me from going with my gut feel – a gut feel that is based upon common sense and the most basic economic education, which is how prices are influenced by supply and demand.

I can understand how easy it is to happen because of my own experience with the Internet stocks, but it is still quite horrifying to me how people can forget about the laws of supply and demand and fall prey to sales hype coming from someone whose job it is to sell some development – whether or not that development really does have good potential or not.

I have seen two examples of this at close hand recently.

Just a few weeks before I met her in late April, my new girlfriend had signed a contract to buy an off-plan property under development in the ski resort of Bansko, Bulgaria.

My reaction was, “Noooooooooooo!!!!!!!!! How could you have done such a thing? All of the reports coming out are saying that Bansko is saturated and it’s going to be impossible to either sell or rent out the properties once they’re completed.”

Unfortunately this was not what she wanted to hear, and she ended up getting into a horrible temper. So now I have learned just not to talk about it at all.

Then, just yesterday, my ex-girlfriend called me up all excited. “Hey!” she said, “I’ve just been given a tip-off about a great new development in Bulgaria that’s got enormous potential.”

“Where in Bulgaria?” I asked.

“On the Black Sea Coast.”

“Where exactly on the Black Sea Coast?”

“Some place called Sunny Beach.”


“But all of my friends are investing in developments there so it MUST be a good investment.”

I won’t repeat the rest of the conversation, but it had a lot of references to ‘a bargepole’ and ‘not touching it’.

I told her to go to Propertastic! and educate herself a little bit about what’s going on with the property market in Bulgaria right now. OK, so my opinion that the market is already saturated is just that – my opinion – which anyone is free to agree with or not, but it’s hard to argue with solid facts and news items telling the actual state of the market as it is already.

After a long conversation, I told her that she should check out Egypt as this is the market that seems to be happening right now. It’s not so easy to get out to Hurghada or Sharm el-Sheikh at this time of year as the temperatures are uncomfortably high – it’s currently the off-season – but when the charter flights start going out there at the start of the winter season in October, I think she’ll be going out there to check out the opportunities.

It is exactly the type of people like my ex and present girlfriends that we created Propertastic! for, so they can make an informed decision about which markets to consider and which to avoid. Neither of them are millionaires with vast amounts of wealth to invest. They are ordinary people who understand that investing in property is the best way of acquiring wealth in the long-term – providing that you get it right. Once you have developed a decent property portfolio, it’s possible to make a mistake from time to time and recover from it. In the early stages though, making the wrong decision concerning which property to buy can kill off someone’s chances of making it big totally.

My one hope is that we don’t end up ‘preaching to the converted’. During the countless hours that I spent online researching the market for international property, I have noticed that investors tend to fall into two distinct groups:

The first are very savvy. They have considered a large number of different options, researched each of them carefully and, after considering all of the facts, have gone with the best options. These are the people who are buying property and real estate in hot markets like Montenegro and Egypt right now. They realize that, if you get it right, there’s a huge amount of money to be made from international property and so it’s worth taking a while to make the right choice.

The second group are not so well-informed. They read the Sunday papers and read articles like “Bulgaria is the next boom market!” and then start contacting agents selling property in Bulgaria. Of course the sales people are quick to tell them everything that they want to hear and so members of the second group end up buying from them. It’s only a couple of years later when they end up with a property that’s impossible to sell or rent out that they realize that they have made a mistake. But it’s too late by then – their life savings are spent already.

Our hopes with Propertastic! are to make it as easy as possible for ordinary people to make an informed decision as to where to invest. The vast majority of information on the site can be found elsewhere, but it would require hours and hours of research to find it all and would require the reader to use their judgement to separate the hard facts from the sales hype and PR-puffery. Another problem is that most of the useful information is written in such a dry and turgid style that people can very easily get bored of the whole exercise and just give up.

Propertastic! has been established in an attempt to resolve all of these problems. We just hope that the second group of buyers are able to find us somehow in order that they avoid making some very expensive mistakes.

Holiday in Alanya, Turkey

I promised my (new) girlfriend a couple of months ago that I would take her on holiday somewhere warm but, what with trying to get the site live, I kept coming up with excuses to keep putting it off.

By the end of July, her patience was wearing a little thin and so I had to arrange something quick and so we ended up going on a last-minute package deal to Alanya in Turkey. Not really my ideal type of holiday, but it was her choice (you know what women are like!)

I had planned to spend quite a bit of time visiting agents and making a video report of my findings, but when I put this to my better half, she told me in no uncertain terms that she would not be at all amused if I spent my time on this, so I don’t have lots of interesting facts and figures to report back.

Alanya is the third biggest destination for foreign buyers and I was surprised to read that it has the highest percentage of foreigners living there in Turkey.

It is quite a cosmopolitan town. Unlike Spain, it is not dominated by the British, but rather there are buyers from all over Europe, especially Germany, Scandinavia and the Netherlands, as well as quite a few Russians and Eastern European.

There isn’t so much prime building land available in Alanya itself any more and so the main developments are happening in satellite towns around Alanya itself such as Avsallar.

Although I believe that Turkey is a market that still offers some good growth potential, I wouldn’t be rushing to invest in property in one of these satellites. They don’t seem to have a lot of character and there’s not a great deal to do there apart from sitting on the beach all day unless you drive into Alanya itself.

I didn't realize it at the time, but yesterday I discovered that I'm not the only one that wasn't too impressed with these satellite towns as news broke that there are now 16,000 unsold homes in the Alanya area. OK, so the situation might not be great there, but I'm really not sure whether I believe the figure of 16,000. Considering the population of Alanya in 2000 was only 88,000, and we can guess that there's about three people per apartment, that means that there were only around 30,000 houses there. OK, so the town has exploded in the last seven years and the population is probably over 100,000 now, but still 16,000 empty apartments still sounds wrong to me.

We did take a couple of excursions, one of which was to the small town of Side. Although we were there less than an hour, I was a lot more impressed with Side than I was Alanya. Side is known for its ancient amphitheatre and this is probably one of the reasons why Side has a more up-market feel to it than Alanya. It is also a lot smaller and there has been a lot less development there to date. Side is also closer to Antalya airport as well.

And the point to this posting is? It’s just to say that, when looking to buy a property in Turkey – or in any other developing market – take a little time to look around at all of the available options. Don’t just leap at the first available opportunity. It’s well worth hiring a car and driving along the coast roads to see what other places are on offer. They are probably going to be a little harder to find because these other resorts are not as heavily marketed as the main locations such as Alanya. But when buying international property, there’s some serious money at stake and so it’s well worth spending time to make sure that you get the location absolutely right if you are looking to make maximum returns on your investment.

Our First Customer Feedback

The first press release spread throughout the Web quickly and the site received its first few visitors. One of them, as we had requested, was kind enough to contact me with some feedback.

Here’s what he wrote:

Budget flights to Belgrade and Podgorica


On your key statistics page, you have said there are no budget flights to either Serbia (Belgrade) or Montenegro (Budva or Podgorica)

I would say that has some pretty reasonable flights (eg under £100 return) to Belgrade & Podgorica.

ThompsonFly have very reasonable flights to Dubrovnik in Croatia which is only an hour's car journey from Budva. (I paid £64 for a return flight at the end of May booked 5 days beforehand.)

Best regards


I was so excited at getting feedback from a real live visitor for the first time, just three days after the site had gone live, that I got back to him immediately:

Hi Davie,

Congratulations! I just wanted to let you know that you are our first real visitor to the site who has taken the trouble to drop me a line.

The site only went live in the wee small hours of Tuesday morning and so we're still ironing the bugs out at the moment.

I feel like I should send you a medal or a bottle of champagne or something, but we've spent our entire budget on Latvian codemonkeys to build the thing!

So at this moment, all I can offer is my sincere thanks for being the first of hopefully many visitors to the site.

How did you find us, by the way?

As for your comments about the flights, yes you're right that the cheapest way to get to Montenegro is via Dubrovnik. We mention this in the Buyer's Guide to Montenegro section.

The problem with compiling the 'Key International Property Statistics' is that there are many cases where there is no definite 'yes' or 'no' answer, but that it should really say 'depends'. But I wanted to avoid adding pages and pages of footnotes to the information there as it's complicated enough already!

Thanks again for taking the time to contact us. I think I'm going to head off and frame your email now!

Have a nice weekend.

Kind regards,


Davie was kind enough to indulge my craving for information and got back to me later that evening:

Hi Nick,

I feel privileged to be your first visitor. Thanks.

I found your site whilst looking for news about Montenegro in Google news.

I have a property in Montenegro that I bought for investment purposes and I tend to watch fairly closely how Montenegro's boom is being regularly reported (especially recently in UK newspapers)

As well as Monte, I keep an eye on the property markets & what's happening in Serbia and Albania - Now there's a high risk/possibly ?! high reward market for you - I guess you'll add this country to your guide at some point.

As to your site ... well I think its nicely laid out. I like the idea of a seperate area for businesses to add their links if they wish and the directory is a great idea. It would be an idea to add some contacts to some of these directories to get things started. (I've added a link to the Bar Association for Monte under Lawyers) The quick guide is fine and the guides are an OK starting place.

Some (hopefully) constructive criticism - perhaps you should think about going into more detail in your country guides (such as the Red Guides and some other magazines attempt - though they do charge a helfy price for pretty obvious info) You could add more info as to where in each country are the (possible) hotspots and interesting possibilities off the beaten track (eg skiing resorts in Monte/Lake Skadar etc) - not just the capital cities - and not just off-plan properties - I never go for these having heard so many horror stories about developers not delivering. For example, having visited Poland recently, some tertiary towns such as Gliwice, Nowy Sacz and Lublin and some of the smaller mountain towns (eg Zywiec, Wisla) are experiencing greater gains than the likes of Krakow, Warsaw and Wroclaw. The guides could also include a little more info about the actual countries and the people.

I must say that nothing beats actually visiting these countries and meeting local agents and foreign property investors and it's obviously difficult to try to give a lot of info i n a couple of pages.

In addition to Albania, have you considered including Moldova & Ukraine ?

Anyway, best of luck.

Best regards


I do like to write and, if someone takes the time and trouble to give me their thoughts then I am more than willing to reply with my own:

Hi Davie,

Thanks for coming back to me so quickly and with such a detailed response.

At the early stage of the site's development, feedback like this is like gold dust as it's easy to get into a 'can't see the wood for the trees' situation after living with the thing for six months.

Albania - did you read this piece plus the comments on it?:

The plan is definitely to fill in the gaps when it comes to countries such as Albania, Moldova, Bosnia and Macedonia. We needed to make a start somewhere though and to cover 16 is taking enough resource as we've got at the moment.

Thanks for the link to the Montenegrin lawyers. There was supposed to be more entries for the directory before the launch than there are, but the guy who was filling it in for us quit a couple of weeks ago and so didn't get to finish it in time.

You're right that more detail would be useful. This is certainly in the plan - we're just at that 'journey of a thousand miles starts with a single step' stage at the moment.

The techies are still at the end of my 'need to have' list at the moment before they can start on my 'would like to have' list - these are the things that we hope will take it from a good site to a great site.

As it says in the About Us section of the site, the idea for it came about because I had bought together with my girlfriend a couple of cheap apartments in Latvia which doubled in price in 18 months. I feared that the market was over-heating and so was looking to get hold of some data where I could see all of the statistics of all of the other Eastern European countries side-by-side. After hours and hours of Googling, I was still none the wiser. The information is all out there on the web, but it took a massive amount of time to assemble it all together. I noticed that other sites covering these subjects 'cop out' if information is difficult to get hold of and just talk in generalities rather than real numbers.

I noticed that not many of the other property sites are using 'Web 2.0' concepts in terms of attempting to form a community of users who are contributing their collective wisdom to inform one another. One of my favourite sites these days is and I wanted to apply the same concepts that they do.

No single person is ever going to have enough knowledge about all of these markets to cover all of the possibilities for investing in 16 different countries. As we all know, two properties just half a mile from one another can have totally different levels of potential, so a site like ours is only ever going to be a very broad starting point. But after inputting all the data and seeing the stories that it told, together with the latest news from each of the countries, I could see which countries had the most potential - and this is not something I was able to get from any other site I visited.

The next phase is to get local 'stringers' in each of the market translating content from the local equivalents of the FT because there's a lot of information from the local markets that never gets translated into English. The Latvian press has been saying that the market here has been on its way down for three months now, but very little of this has filtered onto the web yet. Good news spreads fast on the web because there are sales agents all trying to hype their developments, but they're going to keep quiet when the news is not so rosy.

Before that though, I'm planning on producing podcasts for each of the countries - basically phone interviews with agents in each country. Of course they'll all be trying to sell their territories hard, but I'll be asking them tricky questions so it's more than just more PR-puffery.

And then the plan is to go out and visit the markets with a video camera and shoot some content, like a grittier version of A Place in the Sun?

Before we do all that though, we need to get a few advertisers onboard to fund all my megalomaniacal dreams!

From what I understand, Moldova is in a similar situation to Albania, though I believe that it is slightly more screwed up than Albania and doesn't have any nice coastline either.

I was in Kiev last summer for the first time and couldn’t believe how much development there's been already - it was like being in Dubai. The prices and the rents there looked totally insane to me. I think that Western Europeans should stay well away from it - the Russians have been buying up the country for a long time already and so they're the ones who've already made the easy money from the country.

As you may have noticed, we're also in the process of finishing the Russian version of the site. As they're the other big buyers in Eastern Europe (as you're obviously aware from being in Montenegro) they deserve their own version of the site.

Anyway, I'm sure that I've rambled on enough already, but thanks again for the advice and for listening to me.

Have a very pleasant weekend.

Kind regards,


So, as you can see, I am always interested in receiving feedback from visitors – whether by email to or as comments on what I am writing here. And you can be sure that you’ll get a detailed reply (well, unless I start getting swamped, that is!)

Propertastic’s first Press Release

Just a few days after the site went live, I sent out the company’s first press release.

One thing that I have noticed is that, when there is good news about developments in a property market, you get to hear about it really quickly. The companies selling property in that market are very quick to let the world know about it and the news very quickly spreads virally through the Internet.

When there is bad news about a market, it doesn’t spread so quickly. Sure, the information is released by news organizations, but it doesn’t get picked up and syndicated in the way that the positive news does.

Latvia is one market that I have a particular interest in. The programming for Propertastic! is all done in Riga and so I visit the city on a regular basis. I also have a couple of properties in Latvia myself – not in Riga, but in the number three city in the country, the coastal town of Liepaja.

Together with my ex-girlfriend, we bought a couple of small properties there in good locations – one in February 2005 for EUR13,000 and a second in March 2006 for EUR18,000.

We got our timing right getting into the city as we guessed that the boom in Riga would have to spread to other cities in the country. By late 2006, the first was worth around EUR50,000 (after spending EUR8,000 on reconstruction) and the second one was worth around EUR40,000. We were kicking ourselves at not buying more property in the city while we had the opportunity.

After seeing such incredible returns in such short a time though, I feared that the market was starting to overheat. People had been talking about a bubble in Riga for over a year. While I didn’t think that there was such a danger of prices in Liepaja tumbling, I was pretty sure that prices couldn’t keep doubling annually as they had been doing and so decided that we might be better off selling up and investing elsewhere.

This was actually the impetus that led to the creation of Propertastic! I was sure that I could find a site online where I could see information on all of the emerging property markets side-by-side so I could make an informed decision on what market would be the next to boom. It proved not to be the case though and so I had to spend weeks of Googling in order to get all of the information that I needed – the information that was to become the first draft of the Key Statistics section of the site.

Anyway, to cut a long story short, around the same time, my girlfriend became my ex-girlfriend and we stopped talking with one another for a while and the properties remained unsold and so we still own them together.

This proved to be a shame as, if we had gone ahead with my original plan of selling them at the start of 2007 we would have got out of the market just at the right time.

It was April when things started to go wrong in Latvia. Property prices were already looking over-priced as they were, but the government had to take a number of initiatives in March in order to try and cool down the economy. There was no immediate price crash – for the first few weeks everyone adopted a ‘wait and see’ attitude. By May, however, those that really needed to sell had to start reducing prices a little in order to move them. When they still didn’t move, they had to reduce them a little bit more. By the start of July, prices had already fallen by maybe 5% in total.

I always thought that information on the Internet spreads at the speed of light but, after three months of the market in Latvia (and neighbouring Estonia) going into decline, there was very little information available in English about the current state of the market. Articles about the Baltic Boom were still being circulated.

So I thought that it was time to tell the world the real truth about what was going on in the markets. The results of which you can read in the press release that I issued:

Propertastic! Downgrades Property in Baltics

Welcome to the first post of the Propertastic! blog

So why is there a need for a Propertastic! blog, you may ask, when there is a website in existence that’s already bristling with information on international property and real estate?

This blog will be an outlet for me, Nick Pendrell – the public face of Propertastic! – to give my own thoughts on the property markets in Central & Eastern Europe plus the emerging Mediterranean in areas where they don’t necessarily fit onto the main website. It will also allow me to digress from the main focus of the site, such as into countries that Propertastic! doesn’t yet cover. It also gives me the opportunity to correspond direct with visitors to Propertastic! No one has all of the answers when it comes to investing in property internationally and so I am very keen to hear visitors’ comments in the hope that we can all improve our knowledge of the opportunities available in the region.

The blog will also give me an opportunity to alert visitors of new content to the site as and when it becomes available. Shortly we will begin to produce podcasts – a weekly news roundup together with comments by yours truly, plus in-depth looks at the countries that we cover on the site.

Further down the line, we plan on producing videos that will explore each of the markets in living colour. As soon as they are ready, you will read it here first.

It will also give visitors the opportunity to see how Propertastic! grows over time. At the time of writing, the main site has only been online for three weeks and we’re in our ‘soft launch’ phase. The site is 99% finished, but it’s not completely there yet and so we’re only just starting to attract the first few visitors.

Apart from the above, I don’t really want to plan the format of the blog too far in advance. I would rather that it develops a life of its own and is guided by readers as to what it should and should not contain. I am certainly interested to see what it’s going to contain a few months down the line.