£ versus Euro - anyone feeling the pain?

[Satchi]

FIRST TIMER - BE GENTLE!

I've been keeping a close eye on the £ weakness against the Euro and have found the cost of my investment in Greenfields Bucharest is considerably higher than it was when the deal was originally signed. With things not looking to get any better before completion in May, I wondered if anyone had a plan to ofset these rising costs?

Your thoughts would be appreciated.

in additional I have received the call from FWD saying they will accept furniture orders by credit card.... somehow I am still suspicious

 

[Lysos]

The drop in the UK stockmarket of @ 10% and the depreciation of the £ versus the euro by a similar amount, means my purchasing power is down by the very considerable amount of @ 20%. If overseas agents/developers taregetting Brits don't allow for this I (and many others) won't be investing and they won't be selling !. Wake up time call, but this will be lost on the hucksters at next week's sucker show at Excel.

 

[oregon woodsmoke]

You've discovered the complicated part of investing out of the country: the foreign exchange rate.

There is also the complication of different levels of inflation in different countries.

All there just to keep you on your toes.

(we are really hurting in the USA with the dollar apparently intending to crash and burn)

 

[Aegean]

Invest in locations where you can pay in GBP. There are many around.

Having said that if the Euro had gone down against the £ you would have been quids in as they say.

Swings and roundabouts.

 

[Damian George]

Hi Guys,

The quick answer is that you are not alone in feeling the pain of the Euros rise. I posted this on my works news page and have to say we have a number of clients walking away from deals at the moment and lossing there deposits as it is cheaper than completing. I almost last year bought a place in Calahonda as i ithought it was a good deal - luckily i didnt. Make matters worse I am and looking to buy a place in Oz (my futures family home) and that the GBPAUD has gone from 2.5000 to 2.0750 - think i might put my head in the sand for a little while.

Euros Rally killing Overseas Property Market - The Euro has run away to 0.7680 against the Pound. This means that the Expats that bought last year off plan for Euro 300,000 cost 200,000.00 pounds, but this summer when payment is due will cost 232,558.13 pounds or 16.5% more expensive. Expats now have the decision to make - find the extra money or pull out of the deal and lose their deposit. Adding salt to the wounds is that the properties in Spain have fallen 20% in value. This is not a pretty sight.
29 February 2008 12:14:05

Foreign Exchange News 2008-02-29

 

[misch.chief]

Invest in locations where you can pay in GBP. There are many around.

Having said that if the Euro had gone down against the £ you would have been quids in as they say.

Swings and roundabouts.

I ditto this post - they are definitely options for most developers/agents who are marketing to the uk, just look around.

Misch

 

[overseas wills]

Re

The obvious answer is to recommend to a client other options where you can purchase without using the euro.

The currency market will fluctuate all the time so its about choosing the right time to buy.

 

[DC]

The Uk is only one part of the market.
When UK buyer ease off, Russians, and other nationalities come in.
some markets eg. Spain are worse than others.

 

[oregon woodsmoke]

[[[[........that bought last year off plan for Euro 300,000 cost 200,000.00 pounds, but this summer when payment is due will cost 232,558.13 pounds or 16.5% more expensive. .....]]]]]

AHA!!!! Giving the seller the golden opportunity to brag to new potential investors that the prices have gone up 16.5% in one year alone. Can't beat returns like that.

 

[Lysos]

.......assuming he still has a buyer at that price. I know of several potential buyers in Cyprus who have put things on hold because of the fall in sterling.

 

[Damian George]

yip great returns - but no buyers - also if the buyer pulls out of a deal like so may have the seller is looking at a massive loss as EURO Property Buyers are asking for massive discounts and no matter what the Euro does it isnt helping the fact Spain especially in the Costa Del Sol has an over supply of property. Friends are trying to sell a house at their villa that cost at E600k which is a very realistic price as it is in good location right near banus but the only bid they have had is E400k. Hmm when euro to pound was at 1.45 one would have expected that property to sell easily.

 

[Satchi]

Thanks for the replies

Food for thought next time... to be frank an investment in an english speaking country with a curency outside the euro will probably be where I look

 

[DC]

Think all people in EU wanting buyers from outside EU especially brits and usa will be feeling the pinch.

 

[New Home in Turkey]

Well, here is a comment worth reading...

Hamish McRae: After a decade riding high, the pound may have a long way to fall - Hamish McRae, Business Comment - Independent.co.uk