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Bels
02-09-2009, 21:23
I'm feeling really miserable here :( When on earth are these flats in Moscow going to really come down realistically. Looking at the market place they still haven't got the message. We are now in a recession, and there are no more buffoons to pay for these prices. The international companies are pulling out, not only due to recession, but also due to politacal instability in Russia in how they welcome them. The big prices for overpriced flats are finished now. It;s time to start from 1970 and start more realistic.

tvadim133
02-09-2009, 22:17
Hi!

Agree, but at least prices have been already on the decline about 30%.

"Just wait" I was told 4 years ago by my friend:"The overpricing will be over. Do not buy a flat now". I decided to do and then the price for my appartment went 300% more one year ago. Now it is only + 200% of what I paid.

What I think is that when prices are decreased to 50% from what they cost now it will be good time to buy.

But sq.m will never cost less then $2000 unfortunately.

Bels
02-09-2009, 22:27
Hi!

Agree, but at least prices have been already on the decline about 30%.

"Just wait" I was told 4 years ago by my friend:"The overpricing will be over. Do not buy a flat now". I decided to do and then the price for my appartment went 300% more one year ago. Now it is only + 200% of what I paid.

What I think is that when prices are decreased to 50% from what they cost now it will be good time to buy.

But sq.m will never cost less then $2000 unfortunately.

Let's wait and see :) As I think you are. When there are no spenders, what do you do? I will be here to see it. Recession hasn't got through to Russia yet.

Let us have another look in about 6 months. No buyers, no money

Judge
03-09-2009, 10:56
According to Andrei Klepach, Russia is coming out of a recession.
Official Says Russia Is Emerging From Recession - WSJ.com (http://online.wsj.com/article/SB125111848569953617.html)

Total Ecliptic
03-09-2009, 10:56
today prices for econom housing (mikro-rayons) is still rising, flats are still being bought. With oil prices going up, russia is going to evade a hard banking crisis and prices will not drop. Maybe the 1 million dollar flats in the center loose value but not the houses for normal families. Wishful thinking.

rosieredwood
03-09-2009, 12:04
today prices for econom housing (mikro-rayons) is still rising, flats are still being bought. With oil prices going up, russia is going to evade a hard banking crisis and prices will not drop. Maybe the 1 million dollar flats in the center loose value but not the houses for normal families. Wishful thinking.

Spoken like a true real estate "agent".

trebor
03-09-2009, 12:13
The next 4 months to the end of the year will be critical for Russia. Many companies have hard currency debt that was undertaken when the Ruble was at 25 to the US$. It's now 32 so the size of those debts had risen substantialy. A lot of this debt becomes due in Q4
If Russia survives this period, i think it will, then next year Russia can look forward to recovery and that means a recovery in prices too.
If not then things will turn a lot worse and prices will fall further.
So if you are looking to buy or rent property might be worth waiting awhile to see how things develop.

onlygod
04-09-2009, 00:00
I'm renting in Moscow, I can see prices have dropped quite a bit in the last year and there is more to choose from.

For example, an apartment around Savyolovskaya that cost 80kRub/month last year, at the start of the year was 60k and now I see apartments for about 45k in this area.

I had friends close to Mayakovskaya station in a huge apartment (something like 130sqm). Last year they paid 120k per month. They left Russia at the start of the year, later the landlord called me and asked when are they coming back. I said they aren't, and then I found out that he couldn't even rent it out for 80k, nobody even came to look at it.

I think prices are now at some realistic levels, last year it was overpriced.

I reckon the prices still have some way to fall, but if you are looking for an apartment, I think that there are some good opportunities, you can always tell the owners, look, there are plenty to choose from, I'll go somewhere else and then you can reduce the price even more.

tvadim133
04-09-2009, 00:28
Yes, but again these are so to speak elite estates. Sometimes foreigners are afraid to leave far away from the centre due as they think, following reasons:

1. takes too much time to get to the office (it might be true, if they do it by car, but again it depends upon the route);
2. to live in the center is safety (absolutely, not true. There are lot of sleeping blocks where it is very convinient (parks, shopping malls, restarant (not expensive) and safety to live (in sleeping block there are less "robbers" and smth because such kind of people (if there are) do not "work" where they live).

legspreader
04-09-2009, 10:33
Hi!

Agree, but at least prices have been already on the decline about 30%.

"Just wait" I was told 4 years ago by my friend:"The overpricing will be over. Do not buy a flat now". I decided to do and then the price for my appartment went 300% more one year ago. Now it is only + 200% of what I paid.

What I think is that when prices are decreased to 50% from what they cost now it will be good time to buy.

But sq.m will never cost less then $2000 unfortunately.

I wouldnt be so quick to say that if we ever get to a sembalance of tranparency and market conditions. Im sure there are a lot of people in estonia that had that same feeling and now own real estate worth a fraction of what they paid for it.

legspreader
04-09-2009, 10:40
According to Andrei Klepach, Russia is coming out of a recession.
Official Says Russia Is Emerging From Recession - WSJ.com (http://online.wsj.com/article/SB125111848569953617.html)

We might be bottoming if we dont have the banking crisis in the 4th qtr but regardless russian isnt going to bounce back quickly. The prosperty of russia over the last 10 years was based largly on cheap and easy credit. Those days are long gone. Not to say things are going to be terrible but we're going to snap back to pre crisis levels for many many many years. The hot international money isnt there any more and too many people have been burnt in russia recently to want to come back anytime soon without huge returns.

legspreader
04-09-2009, 10:43
today prices for econom housing (mikro-rayons) is still rising, flats are still being bought. With oil prices going up, russia is going to evade a hard banking crisis and prices will not drop. Maybe the 1 million dollar flats in the center loose value but not the houses for normal families. Wishful thinking.

I'm not going to dispute transactions happening but i dont see any kind of sustain recovery. I think there is some selected activity but probaly not any where near list pricing.

Oil cant save the banks unless we see $100 oil very soon.

the only way for a market to be sustained is through end users buying. There arent enough end users with money to buy at current price levels.

legspreader
04-09-2009, 10:46
The next 4 months to the end of the year will be critical for Russia. Many companies have hard currency debt that was undertaken when the Ruble was at 25 to the US$. It's now 32 so the size of those debts had risen substantialy. A lot of this debt becomes due in Q4
If Russia survives this period, i think it will, then next year Russia can look forward to recovery and that means a recovery in prices too.
If not then things will turn a lot worse and prices will fall further.
So if you are looking to buy or rent property might be worth waiting awhile to see how things develop.

Yep and even if oil stays at current levels we're likely to see the ruble fall 10%-15% in the 4th qtr and the government floods the market with spending making hard currency dept service even more difficult

Russia’s Rating at Risk as Era of Entrenched Deficits Looms - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601095&sid=aCgdfUGjv0RU)

Total Ecliptic
04-09-2009, 16:19
Spoken like a true real estate "agent".


Believe me i am not an agent, as a matter of fact I am looking into buying right now; and went to construction yards in and outside the moscow ring and you know what : the 2-room and 3-room flats in new buildings sell like HOT PIES.
The people today are not buying on bank loans, they are buying on cash they have at hand - or via cash they get from relatives. And there are plenty of people with cash in Moscow. Much more than there are flats available.

Total Ecliptic
04-09-2009, 16:26
Again : I am talking about
1) NEW buildings
2) econom housing
3) 1-2-3 room flats
4) moscow centre or within 10km from MKAD
5) rub price per sqm
in other words the category 80-120 000 rub per sqm

I am not talking about my neighboors' mothers' flat in the Krushevka in Nizhni Novgorod, or about my other neighoors 4room flat on Kutuzovskaya.

Total Ecliptic
04-09-2009, 16:29
the only way for a market to be sustained is through end users buying. There arent enough end users with money to buy at current price levels.

that is exactly what I doubt.

Even looking at official wages : how much money people get out of the grey economy ?

.

GaNozri
04-09-2009, 17:00
Believe me i am not an agent, as a matter of fact I am looking into buying right now; and went to construction yards in and outside the moscow ring and you know what : the 2-room and 3-room flats in new buildings sell like HOT PIES.
The people today are not buying on bank loans, they are buying on cash they have at hand - or via cash they get from relatives. And there are plenty of people with cash in Moscow. Much more than there are flats available.

You either ARE an agent, or an agent's wet dream. When agents tell you that apartments are selling like HOT PIES, you must take it with a grain of salt. I know people who are developers, and they have no reason to lie to me, NOTHING is selling at the moment. Especially, new housing. The only activity in the real estate market are "complex" sales, i.e. people selling 2 small apt's to get a bigger one, or people splitting up, hence selling a large apt to get 2 small ones. These are not market driven, but are a mere necessity. Next time you talk to your agent - tell him/her to bite it!

legspreader
04-09-2009, 17:16
You either ARE an agent, or an agent's wet dream. When agents tell you that apartments are selling like HOT PIES, you must take it with a grain of salt. I know people who are developers, and they have no reason to lie to me, NOTHING is selling at the moment. Especially, new housing. The only activity in the real estate market are "complex" sales, i.e. people selling 2 small apt's to get a bigger one, or people splitting up, hence selling a large apt to get 2 small ones. These are not market driven, but are a mere necessity. Next time you talk to your agent - tell him/her to bite it!

I totaly agree that is one of the oldest and cheapest tricks in the book. a buddy of mine got arm twisted into buying last oct two weeks after i almost begged him not to buy. How did the agent do it? Thats right using those same tactics.

kebab
04-09-2009, 19:56
I sold my flat a few months back. It was euroremonted and in the centre. I had a steady stream of viewers (over 30) as I put it on for a reasonable price - I wanted to sell - but people were still reluctant to buy.
The estate agent (one of the largest) said the market was slow and I was her first sale for about 3-4 months. I decided to sell as prices were only going to come down. The thing is the advertised price is not the price people expect to pay so it is difficult to tell if prices are dropping significantly.

Bels
04-09-2009, 21:34
Believe me i am not an agent, as a matter of fact I am looking into buying right now; and went to construction yards in and outside the moscow ring and you know what : the 2-room and 3-room flats in new buildings sell like HOT PIES.
The people today are not buying on bank loans, they are buying on cash they have at hand - or via cash they get from relatives. And there are plenty of people with cash in Moscow. Much more than there are flats available.

It's not what I see. I see in my area, the Oligarch Ruza area where flats were being developed two years ago. These developements have been partly built incomplete and no further activity is happening. So have what we might call ghost towns all over Moscow and the Moscow regions. This is truly a sign of a recession and it coold have gone either way. What I was hoping is that they would overbuild in small population areas hence reduce prices due to oversupply and choice of homes. But no, it's worse than that, there is no demand for the ones being built, hence the builders have stopped working due to lack of funds. A clear sign of recession, and it appears that the most luxurious flats are suffering the worst in income.

Have you heard the BBC news?? Where have all the Oligarchs gone, as they are not spending. They are no longer spending in Russia, nor London. Clear statistics state that they haven't been spending for the past year.

Bels
04-09-2009, 21:48
Property is not my major subject in regards to Russia. Although I have recently taken interst in this area. It looks like legspreader has always bee keen on this subject, and has always advised to buy or rent cautiously, of which must be clearly appreciated by expats here. We all have our preferred specialities, and I have to give the knowledge and predictions of property to legspreader as I have seen and respected his honest posts for a log time now.

Obviously this period of time is ot good news for those who invested in the purpose of purchasing property for rent or long term investment. But very soon it may well be a good start to create new Oligarchs in Russia, once the real true bargains arise, and the those who can really predict that property prices will rise again.

trebor
04-09-2009, 22:58
We might be bottoming if we dont have the banking crisis in the 4th qtr but regardless russian isnt going to bounce back quickly. The prosperty of russia over the last 10 years was based largly on cheap and easy credit. Those days are long gone. Not to say things are going to be terrible but we're going to snap back to pre crisis levels for many many many years. The hot international money isnt there any more and too many people have been burnt in russia recently to want to come back anytime soon without huge returns.

Russia's prosperity for the last 10 years was based on oil and gas prices.
While it's true many corporations are heavily leveraged the average Russian basically lives from hand to mouth and has little in the way of personal debt.
Hot foreign money has helped to fuel the stock and bond markets but Russia has little in the way of foreign inward investment, so i think the later has no real importance.
While you are right the recovery will be slow i'm not sure you're correct about the time frame. If oil prices move about 25% higher than they are now which is very possible as the recovery takes hold, and the government doesn't introduce necessary regulations to control the economy the party will begin again.

米乐龙
05-09-2009, 10:22
It looks like legspreader has always bee keen on this subject, and has always advised to buy or rent cautiously, of which must be clearly appreciated by expats here. We all have our preferred specialities, and I have to give the knowledge and predictions of property to legspreader as I have seen and respected his honest posts for a log time now.

He is definitely not a specialist in property Bels. If expat.ru hadn't lost half of the post history then you would see that Legspreader has been advising not to buy even when property prices were very low, meanwhile prices skyrocketed and are still high. Predicting doomsday for years is just kind of shotgunning it. I can predict a good economy in soon, perhaps next year or the year after that... or the year after that..., does that make me a specialist or am I shotgunning it like Legspreader?

legspreader
06-09-2009, 18:26
It's not what I see. I see in my area, the Oligarch Ruza area where flats were being developed two years ago. These developements have been partly built incomplete and no further activity is happening. So have what we might call ghost towns all over Moscow and the Moscow regions. This is truly a sign of a recession and it coold have gone either way. What I was hoping is that they would overbuild in small population areas hence reduce prices due to oversupply and choice of homes. But no, it's worse than that, there is no demand for the ones being built, hence the builders have stopped working due to lack of funds. A clear sign of recession, and it appears that the most luxurious flats are suffering the worst in income.

Have you heard the BBC news?? Where have all the Oligarchs gone, as they are not spending. They are no longer spending in Russia, nor London. Clear statistics state that they haven't been spending for the past year.

sadly it was one big pyramid scheme that only worked if prices kept going up and those projects were mostly funded with buyers equity payments not through the developer themselves.

legspreader
06-09-2009, 18:35
He is definitely not a specialist in property Bels. If expat.ru hadn't lost half of the post history then you would see that Legspreader has been advising not to buy even when property prices were very low, meanwhile prices skyrocketed and are still high. Predicting doomsday for years is just kind of shotgunning it. I can predict a good economy in soon, perhaps next year or the year after that... or the year after that..., does that make me a specialist or am I shotgunning it like Legspreader?

look at LM coming in from the peanut gallery. I defy you to go back and find any of my advice over the years that wasnt fundamentally sound. What have i always said. THat the market was not fundamentally sound and a bubble was building. I think i said caustiously buy up until a couple of years ago if you were going to live in the flat but by no means as a invest. After that time i was negative on even buying to live in.

Believe it or not LM I understand a fair bit about real estate. Maybe not an expert on Resi but know enough to see a bubble market forming. Just like a bubble is forming in china. At least there leadership recognizes the danger now and it is trying to manage it but do have much hope for them.

I always loved your favorate justification. I'm right and know better because I own property and you dont.

trebor
06-09-2009, 19:09
look at LM coming in from the peanut gallery. I defy you to go back and find any of my advice over the years that wasnt fundamentally sound. What have i always said. THat the market was not fundamentally sound and a bubble was building. I think i said caustiously buy up until a couple of years ago if you were going to live in the flat but by no means as a invest. After that time i was negative on even buying to live in.

Believe it or not LM I understand a fair bit about real estate. Maybe not an expert on Resi but know enough to see a bubble market forming. Just like a bubble is forming in china. At least there leadership recognizes the danger now and it is trying to manage it but do have much hope for them.

I always loved your favorate justification. I'm right and know better because I own property and you dont.

Legs, i don't know who 米乐龙 or LM is and I'm not keen on people who have multiple log-ins. BUT i have to say he is right about one thing.
I can remember in the beginning of '03 you were telling people not to buy residential real estate as it was extremely over priced. I'm pretty certain you were saying the same thing before that too. I've been posting here since '01.
If someone had bought a flat in Moscow beginning '03 they'd still be sitting on a VERY healthy profit even after the recent falls.

I think people have to just except the fact that residential real estate in Russia will always be expensive. That's the dynamics.

I think that residential real estate is going to be a screaming buy again very soon. Why? Because the recent massive shock to the economy has resulted in anywhere from 30-50% declines in prices, depending on who you listen to.
Can prices fall as far again from here? They can if you can point to another driver to do it. I don't think there is one out there. The economy is not in great shape and unemployment will continue to rise for a while but that doesn't make for another heavy fall in my opinion.
There might be an issue in the bond market in the next few months but the general consensus is that it wont materialise. I don't think prices are going to rise in the near term so i'd wait until the new year and then consider buying. For anyone considering real estate, get the best deal you can and look long term. I think in 5 years you'll be sorry you didn't.

Crazyeelboy
07-09-2009, 09:08
I think Legspreader has given sound commentary all along. I think his point has been to focus on market fundamentals rather than current prices and that the Russian market (or maybe more specifically the Moscow market) has been weak on fundamentals for some time.

legspreader
07-09-2009, 10:37
Legs, i don't know who 米乐龙 or LM is and I'm not keen on people who have multiple log-ins. BUT i have to say he is right about one thing.
I can remember in the beginning of '03 you were telling people not to buy residential real estate as it was extremely over priced. I'm pretty certain you were saying the same thing before that too. I've been posting here since '01.
If someone had bought a flat in Moscow beginning '03 they'd still be sitting on a VERY healthy profit even after the recent falls.

I think people have to just except the fact that residential real estate in Russia will always be expensive. That's the dynamics.

I think that residential real estate is going to be a screaming buy again very soon. Why? Because the recent massive shock to the economy has resulted in anywhere from 30-50% declines in prices, depending on who you listen to.
Can prices fall as far again from here? They can if you can point to another driver to do it. I don't think there is one out there. The economy is not in great shape and unemployment will continue to rise for a while but that doesn't make for another heavy fall in my opinion.
There might be an issue in the bond market in the next few months but the general consensus is that it wont materialise. I don't think prices are going to rise in the near term so i'd wait until the new year and then consider buying. For anyone considering real estate, get the best deal you can and look long term. I think in 5 years you'll be sorry you didn't.

He might be LM on the other site but same guy.

Yes I was negative as there was no basis for the pricing it was being driven by speculation and hot money both local and foreign. In 2003 I do believe I grudgingly agreed that for an end user to buy maybe but as an investor no way. Then in last couple of years my stance end user or investment made no sense. Trebor your falling into the trap that everyone else has. If they were to sell today at “market” yes they would make a nice profit. But do you know what they probably wouldn’t be able to get market if they really needed to sell right now. They’re hypothetically very well off but it’s all on paper. You know what things are likely to get worse here in the near term as well so those paper gains are likely to decline substantially as well.

We’re actually likely to see some hefty inflation as ¾ of the budget spending is slotted for the 4th qtr and the central bank starts printing more money. Ruble Set to Fall 10% by March on Russia Deficit, Shearing Says - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601095&sid=aS.KA6bVxc60)

Great prices have dropped 50% but half off of way to much is likely way too much. How far can prices fall? A long way depending on who the owner is and the state of the market. Just look at what happened in Latvia. I’m sure many held the same views as you.

I do agree with you in terms of people waiting until after the new year until they look at buying. There are likely to be some nasty things happening in the banking sector in the 4th quarter.

legspreader
07-09-2009, 10:39
I think Legspreader has given sound commentary all along. I think his point has been to focus on market fundamentals rather than current prices and that the Russian market (or maybe more specifically the Moscow market) has been weak on fundamentals for some time.

Yes thank you. Once again someone expressing my thoughts more clearly than me ;)

米乐龙
07-09-2009, 11:47
I always loved your favorate justification. I'm right and know better because I own property and you dont.

Never have I said that. I know you want to believe I have said that, but I haven't. Keep it real Legspreader.

legspreader
07-09-2009, 12:01
Never have I said that. I know you want to believe I have said that, but I haven't. Keep it real Legspreader.

what ever. even if hypotheically you didnt you impied it. though im pretty sure you did.

still doesnt change the fact that regardless what i've said over the years is fundamentally sound. your advice has been more along the lines of hey bet red on roulette every time and you cant lose. I pointed out that wasnt the case. you ridculed me for this pointing out all the money you made with the system. sadly as we see the market is spireling lower and lower and is much lower than what the 'official market' because any trades going on are more than likely substantially below those levels.

Great you're ahead on paper with your properties right now. But I be willing to wager that if you wanted to sell right now you'd probaly be very lucky to break even and you know what the market is likely to go lower...

米乐龙
07-09-2009, 12:18
Legs, i don't know who 米乐龙 or LM is and I'm not keen on people who have multiple log-ins.

Just one login on expat.ru trebor. On redtape I am L.M. ;)



BUT i have to say he is right about one thing.
I can remember in the beginning of '03 you were telling people not to buy residential real estate as it was extremely over priced. I'm pretty certain you were saying the same thing before that too. I've been posting here since '01.
If someone had bought a flat in Moscow beginning '03 they'd still be sitting on a VERY healthy profit even after the recent falls.

Exactly, if people had listened to Legspreader back in 2002/2003 or earlier when prices were cheap and not bought an apartment then they would have been financially worse off today. Prices will never go back to 2002/2003 levels, the levels that Legspreader said were overpriced back in the day.

Now, while Legspreader brings up some relevant points, the continuous negativity on the economy has been completely wrong until 2008. Being wrong since at least 2002/2003 doesn't make somebody an expert suddenly when the market has a correction in 2008/2009. That is a lot of years of being wrong. This is an expert? Markets don't just rely on fundamentals to move, if market sentiment says to buy then people will buy, something seen in the Moscow real estate market for years.

Apartment prices have recently decreased and Legspreader is still saying not to buy, meanwhile some economies are showing signs of recovery. If the economy were to suddenly pick up again then I can safely assume that Legspreader will be preaching the same old doomsday scenario for years to come.

A real expert will be able to move with the highs and the lows and tell you with good accuracy when to buy and when to sell. Legspreader is way off, never has there been a good time to buy, only sell sell sell.

Out of interest Legs, what price will you be ready to buy Moscow real estate for?

米乐龙
07-09-2009, 12:27
what ever. even if hypotheically you didnt you impied it. though im pretty sure you did.

Nah, never said it. Quite a strong claim that I did. Hardly the point though.



your advice has been more along the lines of hey bet red on roulette every time and you cant lose.

Never have a given anybody advice on real estate and never have I said anything along the lines what you wrote above, nor have I implied it.



I pointed out that wasnt the case. you ridculed me for this pointing out all the money you made with the system.

Nah, I ridiculed your constant negativity for so long. After so many years you cannot suddenly claim victory.



Great you're ahead on paper with your properties right now. But I be willing to wager that if you wanted to sell right now you'd probaly be very lucky to break even and you know what the market is likely to go lower...

Oh, I promise you that i would come out waayyyy ahead of just break even Legs.

米乐龙
07-09-2009, 12:32
I think Legspreader has given sound commentary all along. I think his point has been to focus on market fundamentals rather than current prices and that the Russian market (or maybe more specifically the Moscow market) has been weak on fundamentals for some time.

Unfortunately markets involve a lot more than just fundamentals. Your "sound commentary" is at least 6 years off target.

legspreader
07-09-2009, 12:48
wow is all i can say. I know i've asked a many many times with no response but what is your education and profession because it dosent appear you understand much about ecnomics.

I've said that this bubble has been building for 6 years so thats how far the market could fall if not farther. Also as i mentioned gains are until you sell and right now thats not going to happen unless you take a big loss. There are saddly many many people globally that thought your way and now are crying in their beers...

I've looked at whats going on at a macro economic level and things aint pretty my friend. the west has turned off the easy credit that fueled the growth of the last 10 years.

the fact of the matter is without the cheap credit we're not likely to see anything like pre-crises levels of business activity for many many years. what was going on was russia and russian banks borrowed money for cheap, as western instutions ingnored risk in pursuit of profit, in the west and relent it here at a nice profit.

Business globally rely on credit to operate both short and long term. The problem is russian business didnt hedge against the potential of the cheap money disappear.

米乐龙
07-09-2009, 13:18
wow is all i can say. I know i've asked a many many times with no response but what is your education and profession because it dosent appear you understand much about ecnomics.

And numerous times I have said "None of your business".



I've said that this bubble has been building for 6 years so thats how far the market could fall if not farther.

Yeah, cool. You are an expert. 2002/2003 you were saying apartments were overpriced. Exactly the same as what you are saying today. Are you seriously claiming victory for a market correction at least 6 years later?[/QUOTE]

Because you are an expert in real estate, could you please tell me what price I should be buying Moscow property for?

Bels
07-09-2009, 13:43
About $20,000 for a two bedroomed flat in Moscow would be nice

legspreader
07-09-2009, 14:15
And numerous times I have said "None of your business".



Yeah, cool. You are an expert. 2002/2003 you were saying apartments were overpriced. Exactly the same as what you are saying today. Are you seriously claiming victory for a market correction at least 6 years later?

Because you are an expert in real estate, could you please tell me what price I should be buying Moscow property for? [/QUOTE]

probaly because your education and professional background give you no understanding of the fundamentals of economics or of real estate.

In terms of commercial real estate i would venture to say yes and there are many many people both in Moscow and abroad that would support this statement. In terms of resi I know enough to see that things are way out of whack. In terms of victory or not. I will claim vicotry over the fact that i have said the fundamentals have been out of alighment for a long time and a bubble market was forming just like dubai just like talin and dublin and many other places across the globe. You cant predict when a bubble market will burst smart guy. Thats the nature of the bubble. if people knew there wouldnt be a bubble in the first place.

If youre dumb enough to be comptelating buying right now its at your own risk. remember you were the same guy that prices would never fall to their current levels. I would say there would be a greater clarity come the start of next year. many many groups that own real estate are holding their collective breath at them moment in the hopes that someone will pay what they're asking and or for the broader economy to recover. if it doesnt come around the way they need they'll be forced to fire sale at any price they can get. its already starting in commercial. I'm sure its happened with resi where banks have quitely taken over projects as well.

Please explain what will support resi at their current levels. I know of a ton of things that are likely to push it down further.

trebor
07-09-2009, 14:29
I have to agree with LM.
I have followed Leg's posts for years-at least back to early 2003 and more than likely back to 2002. He always focuses on the negatives.
Now, that's fine. I enjoy reading them and he has often pointed out issues i had missed elsewhere but trying to comprehend the world and getting a balanced picture by solely reading his posts is like having one eye closed.
Why? Simply because there is always good news and opportunities even in bad times like we are experiencing now. He wont mention them. You have to keep that in mind.
As LM said an expert will be able to point the way forward, not just repeat the negatives. An expert will be able to select opportunities because they are out there right now. Big opportunities Identifying them and when to buy is a real skill.
All the best investers will tell you buy low, sell high. Prices are low now. If you wait for Legs to be positive (which, by the way i have never seen) it will be too late. Prices will be high again.

Bels
07-09-2009, 14:35
Am I right in believing that the true property as we all see it is only about 12 years old in Moscow. Not much of a history to make predictions of property being a good investment from 1997 prices. The problem might be that the prices were over inflated from the very beginning.

You may well profit in the Moscow property market under current prices, but only if you are capable of living and being healthy for over 400 years. And to make things worse is that the international companies withe their well looked after employees are no longer here in droves, and the oligarchs have pulled out.

legspreader
07-09-2009, 14:39
I have to agree with LM.
I have followed Leg's posts for years-at least back to early 2003 and more than likely back to 2002. He always focuses on the negatives.
Now, that's fine. I enjoy reading them and he has often pointed out issues i had missed elsewhere but trying to comprehend the world and getting a balanced picture by solely by reading his posts is like having one eye closed.
Why, simply because there is always good news and opportunities even in bad times like we are experiencing now. He wont mention them. You have to keep that in mind.
As LM said an expert will be able to point the way forward, not just repeat the negatives. An expert will be able to select opportunities because they are out there right now. Big opportunities Identifying them and when to buy is a real skill.
All the best investers will tell you buy low, sell high. Prices are low now. If you wait for Legs to be positive (which, by the way i have never seen) it will be too late. Prices will be high again.


Take things how you will and yes there are always opportunties but generally you need to be very much hooked take advantage of these bargain. We will never have an opportuntiy to trade on them as they'll happen off market. this happens in every other market in the world as well. oh I never said i was a resi expert....

the fact remains how can you do anything when you have gridlock i.e. sellers want more money for their property than the market will offer. By the time sellers finally wake up buyers and lower the sales prices to what the buyer is willing to pay the buyer has drifted lower and no longer will to pay those prices any more. if you think prices are low good for you buy but as i said there is no fudamental for pricing at these levels and the macro economic picture isnt great.

The only way one can map a real way forward is once the market has stabalized and theres some transparency. The monkey way things have been done here i.e. just build it and you'll find a buyer are long gone. Projects will actually have to pencil before their iniated moving forward.

I have one fundamental question for you two where did all of the money that fueled this bubble come from? Dont say oil or natural resources not the answer.

In terms of buying i would rather buy on the way back up than on the way down espcecially in a situation like right now where there is a huge potential for greater falls. I made the comment about my negative commentary to our head of investment one time (yes surprise surprise i have a reputation for being negative in my professional life too). He looked at me and said you're not so much negative but rather pragmatic and those projects you said were rubbish have turned out to be rubbish. Believe it or not i am positive from time to time on various things and projects. Do you know why? Because they are fundamentally sound and sustainable.... Most of the projects both resi and commerical over the last several year have not been sustainable and based on unrealistic expecations that were not sustainable...

legspreader
07-09-2009, 14:41
Am I right in believing that the true property as we all see it is only about 12 years old in Moscow. Not much of a history to make predictions of property being a good investment from 1997 prices. The problem might be that the prices were over inflated from the very beginning.

You may well profit in the Moscow property market under current prices, but only if you are capable of living and being healthy for over 400 years. And to make things worse is that the international companies withe their well looked after employees are no longer here in droves, and the oligarchs have pulled out.

exactly and the numbers of quality apartments have mushroomed since then. supply increased but demand not so much any more...

Bels
07-09-2009, 14:46
Hopefully I have answered that question? Why are we arguing as the fact is lower prices is good news for the buyer. Of course once we buy property some of us would like the property values to rise, as we want our cake and eat it.

But there are many of us who simply want to live in our property and don't give a damn about icreasig value. In fact we might want to affordably upgrade later, as our families get bigger and bigger.

Bels
07-09-2009, 14:54
About $20,000 for a two bedroomed flat in Moscow would be nice

Tell me about it!! I am looking at outside my widow a ghost town of brand new blocks of flats that haven't had builders to complete for over a year. I don't know what on they are going to do with them. Perhaps we shall have a dynamite show next Summer. It was partly due to these observations of mine I wrote this thread. If you others don't see it in your area, then you all must be living in another world.

Bels
07-09-2009, 15:07
I have to agree with LM.
I have followed Leg's posts for years-at least back to early 2003 and more than likely back to 2002. He always focuses on the negatives.
Now, that's fine. I enjoy reading them and he has often pointed out issues i had missed elsewhere but trying to comprehend the world and getting a balanced picture by solely reading his posts is like having one eye closed.
Why? Simply because there is always good news and opportunities even in bad times like we are experiencing now. He wont mention them. You have to keep that in mind.
As LM said an expert will be able to point the way forward, not just repeat the negatives. An expert will be able to select opportunities because they are out there right now. Big opportunities Identifying them and when to buy is a real skill.
All the best investers will tell you buy low, sell high. Prices are low now. If you wait for Legs to be positive (which, by the way i have never seen) it will be too late. Prices will be high again.

All the best estate agents might say that. But I say wait at least 6 months and watch the prices tumble. Apart from my little building plots of land in the Moscow oblast area of course :)

trebor
07-09-2009, 15:18
Take things how you will and yes there are always opportunties but generally you need to be very much hooked take advantage of these bargain. We will never have an opportuntiy to trade on them as they'll happen off market. this happens in every other market in the world as well. oh I never said i was a resi expert....

the fact remains how can you do anything when you have gridlock i.e. sellers want more money for their property than the market will offer. By the time sellers finally wake up buyers and lower the sales prices to what the buyer is willing to pay the buyer has drifted lower and no longer will to pay those prices any more. if you think prices are low good for you buy but as i said there is no fudamental for pricing at these levels and the macro economic picture isnt great.

The only way one can map a real way forward is once the market has stabalized and theres some transparency. The monkey way things have been done here i.e. just build it and you'll find a buyer are long gone. Projects will actually have to pencil before their iniated moving forward.

I have one fundamental question for you two where did all of the money that fueled this bubble come from? Dont say oil or natural resources not the answer.

In terms of buying i would rather buy on the way back up than on the way down espcecially in a situation like right now where there is a huge potential for greater falls. I made the comment about my negative commentary to our head of investment one time (yes surprise surprise i have a reputation for being negative in my professional life too). He looked at me and said you're not so much negative but rather pragmatic and those projects you said were rubbish have turned out to be rubbish. Believe it or not i am positive from time to time on various things and projects. Do you know why? Because they are fundamentally sound and sustainable.... Most of the projects both resi and commerical over the last several year have not been sustainable and based on unrealistic expecations that were not sustainable...

Legs, if there are always opportunities why don't you point some out?
The problem then becomes you will be asked 'why' they are a good buy and you will find yourself in a situation where you have to focus on the positives. I don't think you are able to do it, for whatever reason.

Opportunities only happen off market and we can't benefit from them? That's BS. Millions of people make money in a variety of investments, stocks, bonds, real estate etc. ect over time.
Actually, you don't need any special skills to make money in real estate. Ask any couple who bought property when they first got married, stayed in the market for years and then traded down when they retired. It's a no brainer and one reason why it's so popular to own your own house/apartment.

How can you do anything when you have grid lock? The macro economic picture? Your focusing on the short term, those issues will change. Property is a long term buy. Buy at the best price you can and look long term. Minimum of 5-8 years. Real estate is that easy in my view. It's not rocket science.

The only way one can map a real way forward is once the market has stabilized and there's some transparency? If and when that ever happens prices will already be another 400% higher than they are now. Why? Because everyone and his dog will be buying.

You would rather buy in the way up? You had that chance in 2002/2003. If you had bought then you'd still be 300% to the good.

Legs, i have a mate who is in business development in Moscow. Picking out losers from the thousand of wacky ideas Russians suggest to him is not necessarily as gift. :)

trebor
07-09-2009, 15:23
All the best estate agents might say that. But I say wait at least 6 months and watch the prices tumble. Apart from my little building plots of land in the Moscow oblast area of course :)

Bels, i'm not going to argue with you. Everyone's risk tolerance is different. Why buy something that's going to keep you awake at night?
But remember when the fear has evaporated so have the best prices.

米乐龙
07-09-2009, 16:15
In terms of victory or not. I will claim vicotry over the fact that i have said the fundamentals have been out of alighment for a long time and a bubble market was forming just like dubai just like talin and dublin and many other places across the globe. You cant predict when a bubble market will burst smart guy. Thats the nature of the bubble. if people knew there wouldnt be a bubble in the first place.

Your problem was that you were looking only at fundamentals. Anybody who knows anything about markets will agree that fundamentals are not the only driving force of a market. Many other factors are at play Legs. Anybody can predict a market correction in the long term, market corrections happen in any market. Bubbles form and bubbles pop. Hardly suprising for anybody to predict an economic correction 6 years in advance.


remember you were the same guy that prices would never fall to their current levels.

Once again you are full of $hit. I never said the above nor any of the things you claim in your previous posts. What a joke.



Please explain what will support resi at their current levels. I know of a ton of things that are likely to push it down further.

Yeah, you have a whole "ton" of reasons collected from your 6 or more years of pessimism.

legspreader
07-09-2009, 17:03
Legs, if there are always opportunities why don't you point some out?
The problem then becomes you will be asked 'why' they are a good buy and you will find yourself in a situation where you have to focus on the positives. I don't think you are able to do it, for whatever reason.

Opportunities only happen off market and we can't benefit from them? That's BS. Millions of people make money in a variety of investments, stocks, bonds, real estate etc. ect over time.
Actually, you don't need any special skills to make money in real estate. Ask any couple who bought property when they first got married, stayed in the market for years and then traded down when they retired. It's a no brainer and one reason why it's so popular to own your own house/apartment.

How can you do anything when you have grid lock? The macro economic picture? Your focusing on the short term, those issues will change. Property is a long term buy. Buy at the best price you can and look long term. Minimum of 5-8 years. Real estate is that easy in my view. It's not rocket science.

The only way one can map a real way forward is once the market has stabilized and there's some transparency? If and when that ever happens prices will already be another 400% higher than they are now. Why? Because everyone and his dog will be buying.

You would rather buy in the way up? You had that chance in 2002/2003. If you had bought then you'd still be 300% to the good.

Legs, i have a mate who is in business development in Moscow. Picking out losers from the thousand of wacky ideas Russians suggest to him is not necessarily as gift. :)

Trebor your post seems a bit silly. How many times do I have to say I’m not a resi expert and don’t work resi so how am I going to know about opportunties and if I did I would captilize on them myself wouldn’t once they become public knowledge they’re pricing point swings and they’re no longer opportunties are they.

Ok smart guy. That’s the same logic applied by all the people that have been burned globaly in all types of investments in the last several years. They had the same approach you did. You’re right real estate is a great investment over time if approached correctly. If not it can be the worst investment you’ll ever make I bet you I could find you more people globaly that have that setiment right now than yours. You’re logic may have held true up until the global housing route but I don’t think it holds water right now.

Really theres going to be a buying spree? where is all this magic money going to come from? How are people going to afford to buy? Based on your logic the recovery should have already started to happen as prices have fallen by about half.

Fudamentals my friend they just arent there. Its what I’ve said all along and I don’t many people can dispute this. Can the market defeat fundamentals for a time? Yes but not forever and that’s when we have a correction.

legspreader
07-09-2009, 17:11
Your problem was that you were looking only at fundamentals. Anybody who knows anything about markets will agree that fundamentals are not the only driving force of a market. Many other factors are at play Legs. Anybody can predict a market correction in the long term, market corrections happen in any market. Bubbles form and bubbles pop. Hardly suprising for anybody to predict an economic correction 6 years in advance.



Once again you are full of $hit. I never said the above nor any of the things you claim in your previous posts. What a joke.



Yeah, you have a whole "ton" of reasons collected from your 6 or more years of pessimism.



I dont contest there are other factors in play but when you're talking about real estate better be paying attention to fundamentals. Real estate isnt day trading you're in it for the long haul.

Who says I didnt take advantage of the boom. Real estate isnt the only way to invest money but it is one of the most ilquid. I invested in stocks I admit i wish i would have exited sooner but i got out the same day i made the decsion not so easy with real estate.

LM i've noticed you have nothing concrete to say but that i'm wrong.

khan001
07-09-2009, 17:51
most 'consumer' apartments have been priced in rubles for a good while, which means as the ruble has slipped, so have the prices- as long as you're getting paid in something harder than the quintessentially flaccid ruble (which was simply being sustained on a mixed viagra of oil prices and central bank currency reserves for large swathes of the recent past)

Carl
07-09-2009, 18:22
Apart from my little building plots of land in the Moscow oblast area of course :)

Whereabouts are you Bels? If not a secret, of course:shhhhhh:

legspreader
07-09-2009, 18:31
I guess that sums it up if you realize theres a bubble building yes take advantage but do it in the stock market not the property market. Without doing more homework I'd say you're returns would have been comaprable in the stock or property market over the last couple of years.

Stocks are quick money real estate is long money. That being said if you invest in real estate you better be damn sure you're fundamentals are solid...

trebor
07-09-2009, 19:13
................Ok smart guy. That’s the same logic applied by all the people that have been burned globaly in all types of investments in the last several years................

The last several years would mean they were buying high.
If people start buying now they would be buying low.
It's called investing.

Bels
07-09-2009, 19:18
Whereabouts are you Bels? If not a secret, of course:shhhhhh:

No secret if you read my posts and my advertising for students and pupils in my area. Ruza area, western region of Moscow. I have a classroom at the clubhouse in Gorki 10

MissAnnElk
07-09-2009, 19:29
Bels,

I saw this and thought of this discussion . . .

English Russia » Apartment for Rent (http://englishrussia.com/?p=5146)

Bels
07-09-2009, 19:57
The price is not clear. I'd buy it for $900 as it would be worth refurbishing. However unfortunately I have a funny feeling that is not what they meant.

I have seen such places advertised in France, and they describe them as liveable.

trebor
07-09-2009, 20:35
Trebor your post seems a bit silly. How many times do I have to say I’m not a resi expert and don’t work resi so how am I going to know about opportunties and if I did I would captilize on them myself wouldn’t once they become public knowledge they’re pricing point swings and they’re no longer opportunties are they............................

All of a sudden now you are not an expert? After having asked myself and others what we do for a living and then announcing your in real estate?
Okay, what ever. ;)

When i was asking about opportunities i meant generally. Can't you think of one thing that might be worth buying now?
I've been into commodities for awhile and looking to pickup more. I think when the upturn comes commodity prices will rise as well. Also, there is a strong possibility of inflation at some point with governments world wide printing money. Commodities rise in price in inflationary periods.
Also Chinese equities have fallen 20-30% recently. Might be a good time to pick up some more of those as well.

Bels
07-09-2009, 20:52
And what about us poor people who are only interested in buying or renting property for our families to live in. Is this the best time to buy or rent for us. I don't think so.

For those who purchase multiple properties purely for investment and financial gain? All I can say is good luck to you. Because if I had that extra resource of money, I certainly wouldn't be burning it away in Russian property. But I might wait a little while and hope that prices plummet first.

Carl
07-09-2009, 23:31
Ruza area, western region of Moscow.

Hey we’re almost neighbors! Well, at least during the summer months and a few winter weekends. I have a place on the Ruzskoye water reservoir:verycool:

Bels
07-09-2009, 23:51
Hey we’re almost neighbors! Well, at least during the summer months and a few winter weekends. I have a place on the Ruzskoye water reservoir:verycool:

Welcome and keep in touch. If there are anymore in our area please let us know. Perhaps we could make a section on expat.ru specially for us. As after all it is an area much talked about in all the press. true or not true that is the question. To me it;s a mixture, and yes it where they say all the Oligarchs live. Yes it is the wealth area. Just outside west of Moscow. There are also very nice ordinary people living here in the villages. The villages were expanding fast untill last year, but it will continue once the recessio is over. This expansion some are not happy about, as for example our forests and river of which do enjoy are being destroyed because of certain expansions.

Carl
08-09-2009, 00:05
Welcome and keep in touch. If there are anymore in our area please let us know. Perhaps we could make a section on expat.ru specially for us. As after all it is an area much talked about in all the press. true or not true that is the question. To me it;s a mixture, and yes it where they say all the Oligarchs live. Yes it is the wealth area. Just outside west of Moscow. There are also very nice ordinary people living here in the villages. The villages were expanding fast untill last year, but it will continue once the recessio is over. This expansion some are not happy about, as for example our forests and river of which do enjoy are being destroyed because of certain expansions.

They don’t call it Russia’s Switzerland for nothing:12115:… and I dare say there’s nary a pothole to be found on the roads of the area:zoom:
I'd say you've done well if you bought in the area a few years back..

Bels
08-09-2009, 00:15
They don’t call it Russia’s Switzerland for nothing:12115:… and I dare say there’s nary a pothole to be found on the roads of the area:zoom:
I'd say you've done well if you bought in the area a few years back..

I live a little bit more west than the little Switzerland. Just off rublienskie shosse. But i do have tensotkas of land where you are talkig about and I am hopig for this ew 5th circular road to develop, as my land will be right beside it. They compare it to the M25 in UK and I hope it develops fast. I doubt it under current recession. Yes I would love to build my house i my plot of land in Litle Switzerland, but I need to know that this area will develop that little bit more. Most certainly towns and villages grew fast when the M25 developed in England. And with the correct vision, this is where our new Russian Oligarchs will come from.

legspreader
08-09-2009, 09:47
The last several years would mean they were buying high.
If people start buying now they would be buying low.
It's called investing.

really if you talked to be before buying a couple of years ago they probaly would have said yes but the market is going higher.

so its low right now? compared to what? if your go to play quick flow stocks or for you. for real estate you need fundamentals.

legspreader
08-09-2009, 09:49
All of a sudden now you are not an expert? After having asked myself and others what we do for a living and then announcing your in real estate?
Okay, what ever. ;)

When i was asking about opportunities i meant generally. Can't you think of one thing that might be worth buying now?
I've been into commodities for awhile and looking to pickup more. I think when the upturn comes commodity prices will rise as well. Also, there is a strong possibility of inflation at some point with governments world wide printing money. Commodities rise in price in inflationary periods.
Also Chinese equities have fallen 20-30% recently. Might be a good time to pick up some more of those as well.

I would actaully buy puts on China based funds. Thats a house of cards ready to fall.

Total Ecliptic
09-09-2009, 09:52
I would actaully buy puts on China based funds. Thats a house of cards ready to fall.

pls enlighten the unenlightened about this bold statement.:twofaced:

Crazyeelboy
09-09-2009, 10:43
Here's an idea for those of you who think focusing on investment fundamentals is a bit naive - set up your own investment fund! Go out and pitch your vision to a bunch of professional investors to get some serious leverage. Tell them that your investment approach isn't bogged down with silly little things like "fundamentals" - I'm sure you'll be swimming in cash in no time.

米乐龙
09-09-2009, 12:34
Here's an idea for those of you who think focusing on investment fundamentals is a bit naive - set up your own investment fund! Go out and pitch your vision to a bunch of professional investors to get some serious leverage. Tell them that your investment approach isn't bogged down with silly little things like "fundamentals" - I'm sure you'll be swimming in cash in no time.

Nobody said fundamentals are not relevant, however there are other driving forces in a market. While fundamentals are important, they are not always taken into consideration by investors, the result being an over-inflated market. Still, you can make a lot of money without worrying about fundamentals. An example of this, if Legspreader is to be taken seriously, is the Moscow real estate market. While funadamentals pointed to a bubble in the market since 2002, still many investors bought and later sold property with huge returns. There are plenty of examples of this on expat.ru. If we all took note of the fundamentals back in 2002 and decided not to buy property then financially we would have been worse off. So... sometimes disregarding market fundamentals and instead focusing on things such as investor pyschology can help you to make some large returns on your investment.

trebor
09-09-2009, 13:05
Here's an idea for those of you who think focusing on investment fundamentals is a bit naive - set up your own investment fund! Go out and pitch your vision to a bunch of professional investors to get some serious leverage. Tell them that your investment approach isn't bogged down with silly little things like "fundamentals" - I'm sure you'll be swimming in cash in no time.

I have not said focusing on the fundamentals is naive and i know nothing about 'selling' real estate.
However, i think most people, including professionals, will tell you that when all the fundamentals have turned positive prices are already significantly higher. This is true of all markets not just real estate.
My point is that the 'laymen' can make money in real estate and they nothing of fundamentals.
As i said, wait until the end of the year to give time for the 'bond issue' etc. to play it's self out in the autumn. If there are no major shocks then strike the best deal you can and look long term.
I think you will make money

legspreader
09-09-2009, 13:13
Nobody said fundamentals are not relevant, however there are other driving forces in a market. While fundamentals are important, they are not always taken into consideration by investors, the result being an over-inflated market. Still, you can make a lot of money without worrying about fundamentals. An example of this, if Legspreader is to be taken seriously, is the Moscow real estate market. While funadamentals pointed to a bubble in the market since 2002, still many investors bought and later sold property with huge returns. There are plenty of examples of this on expat.ru. If we all took note of the fundamentals back in 2002 and decided not to buy property then financially we would have been worse off. So... sometimes disregarding market fundamentals and instead focusing on things such as investor pyschology can help you to make some large returns on your investment.

And people wonder how we had the subprime crisis for every person that made money in a bubble market there are probaly ten that lost more. I've said it many times in recent post and i'll say it again. You could have achieved the same returns in the equities markets over the last several years with less risk because you can sell stocks when you want to and you know what price you're going to get. Real estate is different you have no profit until you sell and good luck trying to get the price you want in todays market.

legspreader
09-09-2009, 13:18
pls enlighten the unenlightened about this bold statement.:twofaced:

ok read this first article


http://www.foreignpolicy.com/articles/2009/09/03/how_china_cooks_its_books

combine it with this article

Fed: consumers cut debt by record $21.6B in July - Yahoo! Finance (http://finance.yahoo.com/news/Fed-consumers-cut-debt-by-apf-2523144008.html?x=0)

make your own conclusion

trebor
09-09-2009, 13:44
............I've said it many times in recent post and i'll say it again. You could have achieved the same returns in the equities markets over the last several years with less risk because you can sell stocks when you want to and you know what price you're going to get. Real estate is different you have no profit until you sell and good luck trying to get the price you want in todays market.

That's not true.
Equities are a far more volatile and therefore risky asset than real estate but the returns are usually higher.
When comparing the two at the end of the day you still have the bricks and mortar to live in, whereas with stocks you have a piece of paper and they can and often are worthless.
Can you always sell stocks? Not always. That has been proven in the last year or so. For every seller there still has to be a buyer when that simple balance is gets way out of kilter they close the market. We have seen this.
Also, prices move far faster with stocks (volatility) than real estate giving the potential for bad time timing.
You need far more specialist knowledge to deal in stocks, therefore adding to the risk for the man in the street.
It's not simply a matter of looking 'long term' with stocks either. Sectors in the market rotate, company's fortunes come and go, so to make money you have to buy and sell constantly.
It is true, you can buy through a 'fund' with a specialist manager to take out a lot of the above but it still doesn't alter the fact that equity markets fall (and rise) far faster than real estate markets.

legspreader
09-09-2009, 18:28
That's not true.
Equities are a far more volatile and therefore risky asset than real estate but the returns are usually higher.
When comparing the two at the end of the day you still have the bricks and mortar to live in, whereas with stocks you have a piece of paper and they can and often are worthless.
Can you always sell stocks? Not always. That has been proven in the last year or so. For every seller there still has to be a buyer when that simple balance is gets way out of kilter they close the market. We have seen this.
Also, prices move far faster with stocks (volatility) than real estate giving the potential for bad time timing.
You need far more specialist knowledge to deal in stocks, therefore adding to the risk for the man in the street.
It's not simply a matter of looking 'long term' with stocks either. Sectors in the market rotate, company's fortunes come and go, so to make money you have to buy and sell constantly.
It is true, you can buy through a 'fund' with a specialist manager to take out a lot of the above but it still doesn't alter the fact that equity markets fall (and rise) far faster than real estate markets.

How so?

We were talking about investments not residences. True if youre trading locally you might get screwed with closed markets. But if you buy ADR's or mutual funds outside of russia you can trade any time you want. I agree stocks are more violatile but thats what come with liquitity. Also what kind of expert do you need to be to buy an index fund? I said it before and I'll say it again the gains you would have experienced in the market would have been comparable to the paper gains you saw in real estate over the last several years. I'd rather have a timing issue than inability to sell problem.

I spoke with one guy last night he said he had an apartment just off of pushkino appraised by one of the big resi groups just pior to the crisis at over $2.5 million. Half a year ago something like $1.5 million now they're say like a million. He asked if I were to put it on the market for a million right now would it sell? Silence. If I put it on the market for $500,000 would it sell? Silence. There just the money sloshing around the market any more people are overleveraged dont have access to credit much less cheap credit. this is going to push down prices further....

All these profits you guys have talked about arent profits until you sell and with real estate you generally cant choose when at what price you want.

Andy B
09-09-2009, 19:00
Normally I stay out of these arguments, but gotta agree with LS on this one.

Property IS considered a higher risk asset class than equities... not becasue of volatility, but mostly because of liquidity... you can't always sell a property if you need to! As LS mentioned (generally) you can trade an equities on a daily basis... at much less cost than you can buy sell property!

Also:

Property (generally) comes as a unit of 1. You either sell all of it or none of it, whereas with equities (shares or mutual funds) you can generally sell part of your portfolio (eg. some of your shares) if you need to.

Next: Property is (generally) leveraged so the gains, and losses you may incur are greatly increased compared to the initial amount you need to buy the asset.

Next: You have little scope for diversification with property, unless you are very wealthy and can afford properties in many markets. This can be somewhat overcome with REITS/Property funds, but that's not what we are talking about is it?

Next: The cost of upkeep/maintenance/taxes/utilities etc etc can soon eat into net yeilds/gains (however a lot of property investors either fail to see this, or (and this is probably the case) fail to report this when they boast about how much they "made" with property (everybody likes to say they made money)).

Next: Property is very subject to personal preference of the buyer. And this goes back to the point made earlier... you can't always find somebody who wants to buy your investment for the price you want. This becomes harder and more apparent when the market is falling.

Another problem is most people would never consider selling a property at the bottom of a market crash (unless they had to), whereas many (I'll use the term "amature") investors would have no problem selling their equities after they had lost 40 or 50% and then complain that investing in equities is much riskier than property.... "look at how much I lost" (you only lose if you crystalise that loss).

For the record, I am not anti property. I believe it is an essential asset class in any portfolio. I do believe that people have a misconception about how "risky" property is, and I do believe people have a missconception that ANY property is an investment. I work alongside an excellent property investment company and they have very strict criteria on what they consider is a good Investment property, and conduct thorough research and due diligence before they consider any property market/development (something that many ameture property investors don't do).

That's my input to this thread anyway :)

Andy

trebor
09-09-2009, 20:51
How so?

We were talking about investments not residences. True if youre trading locally you might get screwed with closed markets. But if you buy ADR's or mutual funds outside of russia you can trade any time you want. I agree stocks are more violatile but thats what come with liquitity. Also what kind of expert do you need to be to buy an index fund? I said it before and I'll say it again the gains you would have experienced in the market would have been comparable to the paper gains you saw in real estate over the last several years. I'd rather have a timing issue than inability to sell problem.

I spoke with one guy last night he said he had an apartment just off of pushkino appraised by one of the big resi groups just pior to the crisis at over $2.5 million. Half a year ago something like $1.5 million now they're say like a million. He asked if I were to put it on the market for a million right now would it sell? Silence. If I put it on the market for $500,000 would it sell? Silence. There just the money sloshing around the market any more people are overleveraged dont have access to credit much less cheap credit. this is going to push down prices further....

All these profits you guys have talked about arent profits until you sell and with real estate you generally cant choose when at what price you want.

We are talking about investments not residences? With property you get both.
Even if you buy an investment fund based outside Russia that trades in Russian equities how are they going to buy/sell stock if the Russian market is closed? The only reason a 'fund' domiciled outside Russia is advantagous is through regulations in that country that decide what the fund can and cannot do it can help to protect your investment.
Index funds? The Russian market is so volatile that your perceived 'index fund' IF they exist in Russia is still extremely volatile. Makes your usual description of an index fund a joke.
You talk about real estate in the terms of paper. Very strange. Look at the facts. With property you have what is called a 'tangible asset' with stocks you get paper-nothing else.

The issue of liquidity is a double edged sword. The more liquid an asset is the more suscepatable it is to sharp movements in prices. And therefore risk.
The Russian stock market plunged 80% in a matter of a few weeks last year because it was so liquid.
What did the Russian authorities do to try to stem the crisis in the stock market? They closed it. What does that create for equities? An illiquid market, more like the one that real estate operates in.

Bels
09-09-2009, 21:08
But what about those who buy property for the real purpose intended, ad that is to live or work in. I don't thik it matters if prices rise or go down if your interntion is to use the property for what it was intended for. And most certainly it must be good news that prices drop down much further for those buying there own home in Moscow for the first.

It's very good news when most people including your children can afford to buy or upgrade to another property. So its all about affordable property for those and our next genaration who need it.

It is idiotic and false security to think that the properties you use as an investment.

For those lucky few who can buy numerous properties above owning their own home, and possibly renting them out, then that might be a different story.

So I would like to see property substancially drop to allow more people to afford their own homes.

trebor
09-09-2009, 21:54
But what about those who buy property for the real purpose intended, ad that is to live or work in. I don't thik it matters if prices rise or go down if your interntion is to use the property for what it was intended for. And most certainly it must be good news that prices drop down much further for those buying there own home in Moscow for the first.

It's very good news when most people including your children can afford to buy or upgrade to another property. So its all about affordable property for those and our next genaration who need it.

It is idiotic and false security to think that the properties you use as an investment.

For those lucky few who can buy numerous properties above owning their own home, and possibly renting them out, then that might be a different story.

So I would like to see property substancially drop to allow more people to afford their own homes.

I agree and that is what helps to keep the real estate market relatively stable, therefore less volatile, safer and less risky. The vast majority of people are just living in their apartments and couldn't give a toss if the price is going up or down.
By comparison EVERYBODY in the stock market is a speculator. Unless of course you own your own company and the stock.

legspreader
09-09-2009, 21:57
We are talking about investments not residences? With property you get both.
Even if you buy an investment fund based outside Russia that trades in Russian equities how are they going to buy/sell stock if the Russian market is closed? The only reason a 'fund' domiciled outside Russia is advantagous is through regulations in that country that decide what the fund can and cannot do it can help to protect your investment.
Index funds? The Russian market is so volatile that your perceived 'index fund' IF they exist in Russia is still extremely volatile. Makes your usual description of an index fund a joke.
You talk about real estate in the terms of paper. Very strange. Look at the facts. With property you have what is called a 'tangible asset' with stocks you get paper-nothing else.

The issue of liquidity is a double edged sword. The more liquid an asset is the more suscepatable it is to sharp movements in prices. And therefore risk.
The Russian stock market plunged 80% in a matter of a few weeks last year because it was so liquid.
What did the Russian authorities do to try to stem the crisis in the stock market? They closed it. What does that create for equities? An illiquid market, more like the one that real estate operates in.

Read andys post

Also ADR's listed in London in NY. Even if Russia closes trading in Russia those stocks can still trade on other exchanges. I dont know tyoure trying to get at its with you comment about buying a fund as a joke. Ever hear the phrase dont put all you eggs in one basket. By buying a fund you're buying into multiple different companies and indusries one tanks no worries the other smooth things out.

Yes is went down but you could get out when you wanted and know what its come back substantially already. Do I think its jusified no but its an ability to take adavantage of positive sentament in the market buy short sell high and make your profit. You cant do the same with property.

legspreader
09-09-2009, 22:04
I agree and that is what helps to keep the real estate market relatively stable, therefore less volatile, safer and less risky. The vast majority of people are just living in their apartments and couldn't give a toss if the price is going up or down.
By comparison EVERYBODY in the stock market is a speculator. Unless of course you own your own company and the stock.

are you kidding even the resi brokers conceded that upwards of 2/3 or more of buyer in resi the last several years were speculators not people living there. I remember driving in from the SVO after last new years and shaking my head in disbelief as 2009 was spelled out in apartment windows in a few side by side apartment building between ikea and the mkad. not another light on in the buildings.

too many people that thought the way you do. Many russians were convinced real estate was a one way bet.

trebor
09-09-2009, 22:13
are you kidding even the resi brokers conceded that upwards of 2/3 or more of buyer in resi the last several years were speculators not people living there. I remember driving in from the SVO after last new years and shaking my head in disbelief as 2009 was spelled out in apartment windows in a few side by side apartment building between ikea and the mkad. not another light on in the buildings.

too many people that thought the way you do. Many russians were convinced real estate was a one way bet.

Legs, i'm not even going to bother to dispute the figures with you.

Just consider this: How many people are holding equities because they can fold the share certificates and make something usefull and of intrinsic value out of them like hat?

Bels
09-09-2009, 22:17
Unfortunately if you check archives from Moscow there are many claims that the property in Russia was controlled by investors od all types unkown. There was even a statement of sorts from Putin himself stating that prices were unfortunately not controlled by the people who wanted to dwell in them.

Let's hope that now we really do have a real market of real genuie buyers who wat to purchase their own home. A real price, and mo loger a plastic price.

Adieu
29-09-2009, 08:39
The price of constructing a sq.m. of Soviet-style 16-24 floor panel housing is around 300 bucks. How do we know that? Companies in the Ukraine and various -stans made HUMONGOUS profits building properties and selling them at 500/metre - same floor plans, same panels, same Soviet designs. I've never known of a post-Soviet pre-crisis company that's bothered doing ANYTHING without at least a 50% margin - have you?? So, $300 it is...

Now, consider for a moment the supposed price of land in Moscow if people seriously sold $300-to-build metres for $6k+ in 24-floor buildings... A metre of Moscow land costing $100k = $10 million per sotka?!

I THINK NOT.

Had there been such prices, we would have observed not just the demolition of 5-floor Khrushevkas, but of anything and everything up to and including 16-floor concrete-iron panel housing. Ever seen anyone demolish a 16-floor apartment building? NOPE.

In other words, once the market economy starts actually working in Moscow, we'll be seeing $1k/metre tops in average districts, and much more variation for prestigious areas.

drwho
29-09-2009, 11:00
Just a small comment on my part. I noticed that this forum may be sponsored by a major or a few major property agencies, so just maybe some of them post on here to keep prices as they are or to confuse many of us expats!? Just a point to mention. Look deeper and the answers are there- maybe?!?! I may wrong but it could be true?.......... perhaps some of them post flat adds on here?

Bels
29-09-2009, 12:50
But what if the prices were plasically inflated in the first place due to investers and launderers of whom are no more. And it's only now we are seeing real people wanting to purchase and occupy property.


The price of constructing a sq.m. of Soviet-style 16-24 floor panel housing is around 300 bucks. How do we know that? Companies in the Ukraine and various -stans made HUMONGOUS profits building properties and selling them at 500/metre - same floor plans, same panels, same Soviet designs. I've never known of a post-Soviet pre-crisis company that's bothered doing ANYTHING without at least a 50% margin - have you?? So, $300 it is...

Now, consider for a moment the supposed price of land in Moscow if people seriously sold $300-to-build metres for $6k+ in 24-floor buildings... A metre of Moscow land costing $100k = $10 million per sotka?!

I THINK NOT.

Had there been such prices, we would have observed not just the demolition of 5-floor Khrushevkas, but of anything and everything up to and including 16-floor concrete-iron panel housing. Ever seen anyone demolish a 16-floor apartment building? NOPE.

In other words, once the market economy starts actually working in Moscow, we'll be seeing $1k/metre tops in average districts, and much more variation for prestigious areas.

GaNozri
29-09-2009, 13:32
Unfortunately if you check archives from Moscow there are many claims that the property in Russia was controlled by investors od all types unkown. There was even a statement of sorts from Putin himself stating that prices were unfortunately not controlled by the people who wanted to dwell in them.

Let's hope that now we really do have a real market of real genuie buyers who wat to purchase their own home. A real price, and mo loger a plastic price.

That is also a bunch of BS. Investors my arse! Unless you consider the developers themselves to be investors. It is very simple: developer gets a piece of land, pays bribes to the city for permits, gets credit from a bank, develops property. In normal markets, the developer at this point must sell the property to pay off the bank, reducing the price if and when it's not selling. In normal markets. In Moscow, he develops, say 100 apartments, sells 20 at 500% profit - pays off the bank (partially perhaps), gets another parcel of land, gets another loan from bank using the 80 remaining apartments as collateral (at inflated prices), pays bribes to the city, develops another property, and so an, and on, and on....

Developers have no incentive to sell the developed property at (real) market prices, they would much rather keep the unsold (but highly valued) property on their books and use them as collateral assets.

This WILL come to an end though, and with a big BANG! Several scenarios, but most likely, IMO is ruble dropping to ~40/$, banks start asking for their ($denominated) loans back, developers no longer can make payments, release the properties on the market, prices drop, they still can't cover their loans. developers (along with the banks) start folding, retail prices fall to 1995 levels, standing banks and (their pocket) developers start buying properties in bulk, thus starting a brand new bubble.

Plus, it's not like there is a bunch of new development going on at this point. So, we are definitely at the end of the cycle here. The objective now (for property buyers) is timing it so that we can jump in before, or at least at the same time the big players start buying everything up and playing the good old price fixing game again.

legspreader
29-09-2009, 14:54
Plus, it's not like there is a bunch of new development going on at this point. So, we are definitely at the end of the cycle here. The objective now (for property buyers) is timing it so that we can jump in before, or at least at the same time the big players start buying everything up and playing the good old price fixing game again.

I agree and have speculated on much of what you've said. the quote above is an interesting idea but theres not enough liquid money out there to soak up all the property if the bottom falls out...

GaNozri
29-09-2009, 15:01
I agree and have speculated on much of what you've said. the quote above is an interesting idea but theres not enough liquid money out there to soak up all the property if the bottom falls out...

Hopefully, you are right. that would leave the small fish some room. The worst scenario is that the process will be open to the big players only, and will result in Alpha/Mirax kinda deals, which will have limited effect on the market. If that happens, it will sustain the bubble for yet some time.

trebor
29-09-2009, 17:05
I agree and have speculated on much of what you've said. the quote above is an interesting idea but theres not enough liquid money out there to soak up all the property if the bottom falls out...

If the events of the past twelve months and the massive knock-on effect to the financial system and the economy haven't caused the "bottom to fall out" of the property market by now, i'm not sure it will.
We're not out of the woods yet but my guess is if Russia survives the next few months without any major shocks the scene is set for some kind of recovery.

GaNozri
29-09-2009, 17:13
If the events of the past twelve months and the massive knock-on effect to the financial system and the economy haven't caused the "bottom to fall out" of the property market by now, i'm not sure it will.
We're not out of the woods yet but my guess is if Russia survives the next few months without any major shocks the scene is set for some kind of recovery.

The real estate bubble was here way before any financial crisis, and will have to be dealt with eventually, ragardless of the recovery.

Adieu
30-09-2009, 05:19
If the events of the past twelve months and the massive knock-on effect to the financial system and the economy haven't caused the "bottom to fall out" of the property market by now, i'm not sure it will.
We're not out of the woods yet but my guess is if Russia survives the next few months without any major shocks the scene is set for some kind of recovery.

It sort of HAS caused the bottom to fall out of the market... It's just that sellers haven't come to terms with that fact. Two of the stages of dealing with loss, according to modern psychiatry, are 'Bargaining' and 'Denial'. That is what we are seeing today.

There are price tags, sure, but no one is buying, no one is managing to make a sale. The rare sale that does occur is despair- or urgency-driven and happens at rates far, far below the quoted price.

trebor
30-09-2009, 05:44
The real estate bubble was here way before any financial crisis, and will have to be dealt with eventually, ragardless of the recovery.

Of course it was. My point is that we might be at or near the bottom already. People waiting and still expecting the 'bottom to fall out' could be disapointed.

trebor
30-09-2009, 05:59
It sort of HAS caused the bottom to fall out of the market...................

Precisely. Perhaps this is as bad as it's going to get. Many people are expecting things (economy) to start improving sometime soon. Real estate should follow.
I'm not sure why people belive Moscow real estate will ever cheap.

Adieu
30-09-2009, 06:20
Actually, I was saying that the bottom has fallen out of the market, but stubborn owners are still in denial about supply&demand and hoping for miracles. Give the idea a few months to sink in. They'll start selling at market prices once the banks come knocking on their doors.

No money and plummeting incomes = limited options to borrow or sell less important properties to make those obscenely high mortgage payments. And there are absolutely no refinancing options available. Once they run out of relatives to borrow money from and finish selling off their cars and electronics, they will be forced to sell.

And if they don't, you can always wait another month and pick up the foreclosures that the banks will be auctioning off.

drwho
30-09-2009, 08:07
Precisely. Perhaps this is as bad as it's going to get. Many people are expecting things (economy) to start improving sometime soon. Real estate should follow.
I'm not sure why people belive Moscow real estate will ever cheap.

Real estate may never be "cheap" but is over priced!! this is a fact. The old supply & demand bug again. There are not enough standard non luxury flats for renting and buying here so every mojo on the block is on the bandwaggon letting out their flat that frankly should either be in a 1955 museum or in a book on how not to decrate and furnish a flat............. Ow that hurt, I know, I'll put my claws away! and please don't call me Bruno !! but someone call Ze fashion police:11088:

:applause:

GaNozri
30-09-2009, 12:56
Of course it was. My point is that we might be at or near the bottom already. People waiting and still expecting the 'bottom to fall out' could be disapointed.

No we are not. Not yet. We will be once the banks start knocking on developers' door. The process is starting, but is not in full swing yet. Once we see major developers fold on a weekly basis for a couple of months - that's the bottom.

trebor
30-09-2009, 12:58
No we are not. Not yet. We will be once the banks start knocking on developers' door. The process is starting, but is not in full swing yet. Once we see major developers fold on a weekly basis for a couple of months - that's the bottom.

Best of luck.

legspreader
30-09-2009, 16:45
If the events of the past twelve months and the massive knock-on effect to the financial system and the economy haven't caused the "bottom to fall out" of the property market by now, i'm not sure it will.
We're not out of the woods yet but my guess is if Russia survives the next few months without any major shocks the scene is set for some kind of recovery.

give it some time yet. so real nastyness is possible once banks start coming clean with regards to their real liabilities situation. the funny sad thing i've noticed in russia people will hold out to the bitter end standing firm on their price even in the face of impending doom. thats why we havent seen the bottom drop out. The own/developer/investor holds out for what they think is market pricing not wanting to leave any money on the table. they hit the point of no return it goes back to the lender(generally without the broader market knowing). the game starts over again pricing stays put as the bank doesnt want to leave any money on the table. but oops here comes the annaual aduit and reprising of the assets on the books oops now the banks in breach of all sorts of covenants.

legspreader
30-09-2009, 16:52
Of course it was. My point is that we might be at or near the bottom already. People waiting and still expecting the 'bottom to fall out' could be disapointed.

Thats wishful thinking on your part if you're trying to sell. But how? ive said many times and i'll say it again. To have a sustainable market you need for people to actually be able to buy and live in the flats they've bought. not the case right now espcially in light of falling real wages both official and unofficial.

Things arent going back the way the were any time soon even with high oil pirces as russia wont be able to get the cheap credit that really drove things over the last several years. lenders are much more careful and pricing risk again.

alexstone
12-10-2009, 18:21
Thats wishful thinking on your part if you're trying to sell. But how? ive said many times and i'll say it again. To have a sustainable market you need for people to actually be able to buy and live in the flats they've bought. not the case right now espcially in light of falling real wages both official and unofficial.

Things arent going back the way the were any time soon even with high oil pirces as russia wont be able to get the cheap credit that really drove things over the last several years. lenders are much more careful and pricing risk again.

I sort of agree with some of this, but will add, this isn't Britain, or Europe, or other countries with a large middle cl**** to use a common phrase. So there's debt at a speculative level, but not at a grassroots level, to the same extent.

So i think there's a glimmer of enthusiasm that the market won't neccessarily crash hard for prices, but have the odd circumstance where large developments will lose value further, but the bulk of prices in established areas will just dip a bit instead.

Let's not forget here the banks in Russia have had sizable chunks of help. I'm fairly certain the Gov will take the opportunity to weed a few more out, particularly those "investment" banks that represent a dime a dozen, and don't generally touch the public at large, but the larger players will probably stand a larger real estate portfolio without panicking, hence be not so willing to firesale.

My own experience here is that Russians are a hardy bunch, and know what it is to tighten the belts, wait things out, and most importantly of all, help each other out as family and friends in these challenging times, probably more so than other countries who have completely embraced the capitalist, i.e. crippling debt, "ideal." I don't see prices falling hard, or much further, because of this.

2 roubles worth,

Alex.

legspreader
14-10-2009, 14:59
I sort of agree with some of this, but will add, this isn't Britain, or Europe, or other countries with a large middle cl**** to use a common phrase. So there's debt at a speculative level, but not at a grassroots level, to the same extent.

So i think there's a glimmer of enthusiasm that the market won't neccessarily crash hard for prices, but have the odd circumstance where large developments will lose value further, but the bulk of prices in established areas will just dip a bit instead.

Let's not forget here the banks in Russia have had sizable chunks of help. I'm fairly certain the Gov will take the opportunity to weed a few more out, particularly those "investment" banks that represent a dime a dozen, and don't generally touch the public at large, but the larger players will probably stand a larger real estate portfolio without panicking, hence be not so willing to firesale.

My own experience here is that Russians are a hardy bunch, and know what it is to tighten the belts, wait things out, and most importantly of all, help each other out as family and friends in these challenging times, probably more so than other countries who have completely embraced the capitalist, i.e. crippling debt, "ideal." I don't see prices falling hard, or much further, because of this.

2 roubles worth,

Alex.

But the problem is the banks lets to much money for overvauled assets in all classes. that means huge holes in balances sheets. Will the government let the big boys fail? probaly not but can the government afford to bail them out at the moment? not really. pretty much all the banks are unside down and blue screwed and tatooed at this point. They're all just playing accounting games to push off their reconnings that will be coming much sooner than later im thinking...

GaNozri
14-10-2009, 15:15
Those who know the difference between RAS and GAAP, know that bad debt under GAAP is written off completely when it comes overdue. Under RAS, only the portion which is ovedue can be written off. That said Russian banks still carry over 10% bad debts on their books. In reality it is more like 30%+. And this has only been "the first wave"! Kudrin today said that over 200 banks will fold in the next 12 months. Knowing Kudrin, it'll be more like 800. Can anyone seriously assume that there is not going to be a massive asset selloff?

legspreader
14-10-2009, 16:59
Those who know the difference between RAS and GAAP, know that bad debt under GAAP is written off completely when it comes overdue. Under RAS, only the portion which is ovedue can be written off. That said Russian banks still carry over 10% bad debts on their books. In reality it is more like 30%+. And this has only been "the first wave"! Kudrin today said that over 200 banks will fold in the next 12 months. Knowing Kudrin, it'll be more like 800. Can anyone seriously assume that there is not going to be a massive asset selloff?

I dont know or pretend to understand the detail. but when banks have hard currency obligations and not enough currency what are they going to do? The fact that sberbank has come out and said they're going to acution real estate for their profolio screams shit is about to get nasty. Especially when you consider they fired one of their senior bankers for suggesting just this at adam smith conference this last spring .....

trebor
13-11-2009, 10:25
I thought i would revive this thread with some good news on the Russian economy.
I suggest those who posted earlier on this thread who were interested in investing in property in Moscow. Now could be a good time.
Looks like the economy has finaly turned the corner. We're not completely out of the woods yet, there are still risks but i think the worst is over.

BBC NEWS | Business | Russian economy growing strongly (http://news.bbc.co.uk/2/hi/business/8357767.stm)

Russian economy growing strongly

Russia's economy is heavily dependent on oil
Russia's economy grew by 13.9% between July and September compared with the previous quarter, the country's federal statistics agency has said.

The strong growth provided evidence of the country's recovery from a severe economic downturn.

The Russian economy, which is heavily reliant on oil exports, was one of the worst hit by the global downturn.

The rebound in the oil price since the start of this year has helped the economy to recover.

Compared with the same three months a year ago, however, the Russian economy shrank by 8.9%.

Fragile recovery

Earlier on Thursday, Russian President Dmitry Medvedev said his government had succeeded in stabilising the economy.

"But the revival in the markets remains weak and unstable. And the most dangerous thing now is to calm down. We have to continue realising the anti-crisis plan and be ready to implement new measures," he cautioned.

Analysts also argued that the recovery was fragile and heavily dependent on the oil price.

"The main driver of the recovery was the increase in oil and metal prices and the trickle down effect on production in those supporting industries," said Chris Weafer at Uralsib.

"The recovery is very dependent on the global economy rather than domestic factors. If the rest of the world [contracts], then Russia's economic revival would stall and possible reverse."

legspreader
13-11-2009, 11:28
I thought i would revive this thread with some good news on the Russian economy.
I suggest those who posted earlier on this thread who were interested in investing in property in Moscow. Now could be a good time.
Looks like the economy has finaly turned the corner. We're not completely out of the woods yet, there are still risks but i think the worst is over.

BBC NEWS | Business | Russian economy growing strongly (http://news.bbc.co.uk/2/hi/business/8357767.stm)

Russian economy growing strongly

Russia's economy is heavily dependent on oil
Russia's economy grew by 13.9% between July and September compared with the previous quarter, the country's federal statistics agency has said.

The strong growth provided evidence of the country's recovery from a severe economic downturn.

The Russian economy, which is heavily reliant on oil exports, was one of the worst hit by the global downturn.

The rebound in the oil price since the start of this year has helped the economy to recover.

Compared with the same three months a year ago, however, the Russian economy shrank by 8.9%.

Fragile recovery

Earlier on Thursday, Russian President Dmitry Medvedev said his government had succeeded in stabilising the economy.

"But the revival in the markets remains weak and unstable. And the most dangerous thing now is to calm down. We have to continue realising the anti-crisis plan and be ready to implement new measures," he cautioned.

Analysts also argued that the recovery was fragile and heavily dependent on the oil price.

"The main driver of the recovery was the increase in oil and metal prices and the trickle down effect on production in those supporting industries," said Chris Weafer at Uralsib.

"The recovery is very dependent on the global economy rather than domestic factors. If the rest of the world [contracts], then Russia's economic revival would stall and possible reverse."

Wow how do you take that to mean its time to buy. I read that as a definate maybe, from the president, in terms of the economy being on track

The economny really is a basket case at this point. The banking sector is under water and upside down. Russian is the only brick country that hasnt seen debt issues snap back to pre-crisis levels. Why you might ask. Simple they havent been able to restructure exising outstanding loans.

If you want the real story all you have to do is read between the lines. Central bank has cut interest rates 6+ time in the last 6 months with each cut lending actually decreases not increase in lending from the banks. Big red flag. Sberbank has anounced its going to fire 27,000 jobs this year. a state controlled "cash cow" that is "heathly" cutting that many jobs when the state is trying crush unemployment bigger red flag.

But the biggest red flag are the mono gorads of which Toliati is the poster child. Avtovaz needs something to the tune of $2 billion to get them throught until the start of next year this on top of the $750 million they've already burnt through earlier this year.

sadly theres going to be some very nasty times ahead with the banks. They are all holding toxic assets. If they were to recognize the actual values of the assets on their books the majority if not all banks in russia would be insolvement. This is espcially true for the big quasit sovreign such as Sber, VEB VTB

trebor
13-11-2009, 14:18
sadly theres going to be some very nasty times ahead..........

Things never change do they legs?:rofl:

legspreader
13-11-2009, 14:30
Things never change do they legs?:rofl:

Ok you explain why things are looking so good. I think i made some pretty valid points regarding why things havent hit bottom yet.

Hey I'm a big russia fan but saying things are ok just doesnt make it so.

trebor
13-11-2009, 14:44
.......We're not completely out of the woods yet, there are still risks..........

Legs, try reading my posts.
I never said everything is okay. I am not disputing what you have written. I just disagree with your conclusion. I think the government will manage the situation as they have done for the past 12 months and the situation will not get out of hand.
I believe the Russian economy is now on the road to recovery.
BUT We're not completely out of the woods yet, there are still risks ;)

legspreader
13-11-2009, 14:54
Legs, try reading my posts.
I never said everything is okay. I am not disputing what you have written. I just disagree with your conclusion. I think the government will manage the situation as they have done for the past 12 months and the situation will not get out of hand.
I believe the Russian economy is now on the road to recovery.
BUT We're not completely out of the woods yet, there are still risks ;)

ok that being said how does that translate into time to buy resi? Wow you have a much higher opinion of what the goverment has done than me. though i will admit that they have done some things well.

As i said before and will say again the banks are going to be a major problem. lots of toxic assets on every banks books.

trebor
13-11-2009, 15:09
ok that being said how does that translate into time to buy resi?...............

I imagine that anyone who was considering buying real estate or any investment for that matter in Russia would understand that there will ALWAYS be risks.
If you except that and look long term i think now could be a good opportunity.
I don't know exactly the size of the debt problems at the banks and neither do you i guess but i do know the government will not let the banking sector go under.
I believe the situation will be managed.

legspreader
13-11-2009, 15:26
I imagine that anyone who was considering buying real estate or any investment for that matter in Russia would understand that there will ALWAYS be risks.
If you except that and look long term i think now could be a good opportunity.
I don't know exactly the size of the debt problems at the banks and neither do you i guess but i do know the government will not let the banking sector go under.
I believe the situation will be managed.

why do you think international investors are leaving russia in droves...

Resi is way over valued full stop if you're looking for an investment better places to put your money.

as for the problems with banks it doesnt take a rocket scientest to understand there are major problems that are being glossed over. if things were so stable why is sberbank a quasi governmental ogranization fireing 27k people by the end of the year with and eye on firing another 50k-75k people over the next couple of years.

I agree the goverment will do its best to stabalize the banking sector but it doesnt have enough cash to save the entire thing if it goes pear shaped.

This reminds me of the pissing match i got in with posters last year with the goverment came out with the anti crisis plan last year. I said it was not workable as they couldnt fight battles on all fronts and win. Many people said i was an idiot ant that government had over $600 billion and could do whatever it wanted. What happened the goverment abandoned the majority if not all of the elements of their plan by early this year and burned through a couple of hundred billion in the process.

The reality is russia is hugely over leveraged largely based on inflated asset values pre-crisis. The economy was built on access to cheap and easy credit now that the taps are turned off and not going to come back on anytime soon things are much worse off than any media outlet will admit.

All this being said we had a huge asset bubble that was built on this cheap credit and perception of demand. Now both are gone and with it property prices will fall further. I just got back from dubai and our market looks like a rocket ship by comparsion new construction everwhere with existing building half empty. but do you know what prices havent fallen that much. know why because just like russia sellers are sitting firm on their price. but eventually after months of losses they're take what they can get.

rugbymad
13-11-2009, 16:02
So much depends on the oil price - see for yourself. If you overlay a graph of world oil prices and the Moscow real estate prices, they match up pretty well, with real estate lagging a few month behind. The connection is fairly obvious. According to the graphs on irn.ru, Moscow prices are already slightly on the up - that again would correspond to what's happened with oil in the last year. I'd be fairly surprised if prices didn't start going up again soon, albeit fairly steadily and slowly. Long term, they might be going up fairly radically if we get the big spikes in the world oil price that I am expecting. I don't think they will ever fall much - compare Moscow to any big city in UK or Europe and it doesn't look that expensive.

legspreader
13-11-2009, 16:21
So much depends on the oil price - see for yourself. If you overlay a graph of world oil prices and the Moscow real estate prices, they match up pretty well, with real estate lagging a few month behind. The connection is fairly obvious. According to the graphs on irn.ru, Moscow prices are already slightly on the up - that again would correspond to what's happened with oil in the last year. I'd be fairly surprised if prices didn't start going up again soon, albeit fairly steadily and slowly. Long term, they might be going up fairly radically if we get the big spikes in the world oil price that I am expecting. I don't think they will ever fall much - compare Moscow to any big city in UK or Europe and it doesn't look that expensive.

i would say that coorilation will weaken the future. in the past it was bank of real estate as investors thought real estate was a one way bet.

as for not too expensive are you kidding me by what standard. on a straight sticker price basis its amoung the highest in the world, earning power is much lower, and morgates are at extoritionary rates.

trebor
14-11-2009, 01:11
why do you think international investors are leaving russia in droves...

Resi is way over valued full stop if you're looking for an investment better places to put your money.

as for the problems with banks it doesnt take a rocket scientest to understand there are major problems that are being glossed over. if things were so stable why is sberbank a quasi governmental ogranization fireing 27k people by the end of the year with and eye on firing another 50k-75k people over the next couple of years.

I agree the goverment will do its best to stabalize the banking sector but it doesnt have enough cash to save the entire thing if it goes pear shaped.

This reminds me of the pissing match i got in with posters last year with the goverment came out with the anti crisis plan last year. I said it was not workable as they couldnt fight battles on all fronts and win. Many people said i was an idiot ant that government had over $600 billion and could do whatever it wanted. What happened the goverment abandoned the majority if not all of the elements of their plan by early this year and burned through a couple of hundred billion in the process.

The reality is russia is hugely over leveraged largely based on inflated asset values pre-crisis. The economy was built on access to cheap and easy credit now that the taps are turned off and not going to come back on anytime soon things are much worse off than any media outlet will admit.

All this being said we had a huge asset bubble that was built on this cheap credit and perception of demand. Now both are gone and with it property prices will fall further. I just got back from dubai and our market looks like a rocket ship by comparsion new construction everwhere with existing building half empty. but do you know what prices havent fallen that much. know why because just like russia sellers are sitting firm on their price. but eventually after months of losses they're take what they can get.

International investors can leave Russia in droves. When were they ever that important? But having said that, I agree with Medevedev's speach
the other day, that Russia should diversify it's economy from being oil based and explore other opportunities. Perhaps it's just talk we will see. If it's not and they do action i see further prospects to make money.
How many possible oppotunities in Russia can you name that would benefit from direct investment and favourable government assistance?

Better places to put your money? Legs, i would LOVE to hear you bullish on ANYTHING!! I think you are unable to recommend anything as a buy. Go on, prove me wrong. ;)

Sberbank has told you they are considering laying off 50-75,000 people over the next couple of years? Since when did companies come out with statements like that? How can an organisation possibly know what it's staff needs will be 2 years from now and much more publish them now. Bullshit.

The government doesn't have enough cash? Last time i heard a couple of months ago they still have around 400 billion dollars in hard currency reserves.
Of ourse no central bank in the world has enough to save/buy out it's own banking system. Not even China with it's 2 trillion of dollar reserves. But it's a game of confidence and Russia has more than enough to win the game. But i don't think it will come to that.

You had a pissing contest with someone on this site about the size of the the Russian government's hard currency reserves? Then you definately lost!
The ruble didn't crash and burn.
The Russian banking system didn't collapse.
The Russian central bank is not bankrupt.
And there is still around 400 billion$ in the pot.
That's why the "Contingency Fund" was set up in the first place, for just an event like the one of the last year.

I agree with your point about the corporate sector (you didn't mention 'corporate' but i assume that's what you ment. The Russian consumer is not burdened with so much debt) but the strengthening ruble helps with foreign debt repayment. So i don't see the problem spiriling out of control.

You could be exagerating the fall in demand. Everyone and his dog was saying how demand fell off a cliff at the end of last year and through the early part of '09, that's true it did but the stats. now indicate a recovery is in progress.
The sustainability of that recovery, which was driven by huge fiscal stimulus packages, is down to viable 'Exit Strategies' by the central banks.
At some point they must reduce spending and economies must start to grow again organically. How and when they do so is still open to debate. For me this is the biggest single risk. Will central banks keep loosening fiscal policy and create another bubble or will they tighten too soon and risk a return to recession. The jury is still out.

I am always interested by people who question the market. Like, the situation is REALLy bad but you know what? Prices haven't fallen that much. Guess what? That means the situation is NOT that bad. If it was prices WOULD have fallen harder. It's not rocket science!

Dave78
14-11-2009, 10:53
...sadly theres going to be some very nasty times ahead with the banks. They are all holding toxic assets. If they were to recognize the actual values of the assets on their books the majority if not all banks in russia would be insolvement. This is espcially true for the big quasit sovreign such as Sber, VEB VTB

This is an interesting thread. My comment would be first that Sberbank probably can be in decent shape (I doubt it is, but read on) and still fire 10s of 1,000s of people because they are quite likely still bloated staff-wise from the old Soviet day. I'm just saying that to give my point of view that massive lay-offs need not necessarily be linked to a lack of solubility.

OTOH, hand I tend to believe legs, because even though Sbrebank might possibility do best by firing people even if in decent shape, for political reasons they probably wouldn't do it in such a massive way. So, the conclusion might be that things really are bad.

Now, that said - I'm very interested to learn more about the real financial condition of VTB bank? Where can I learn more about it? I know it's like 85% state-owned, but are there some decent sources for finding their reports and reading between the lines to determine how much their assets are really truly worth and how far they might be over-extending them?

Sorry if I'm derailing the thread here, PM if you feel that is better. OR we could start a new thread on the state of the banking system.

Allusya
14-11-2009, 11:32
I rent a flat in a satellite town of Moscow - the same prices, decreased a little last year and no further decrease is expected.

Bels
14-11-2009, 14:52
I rent a flat in a satellite town of Moscow - the same prices, decreased a little last year and no further decrease is expected.

You don't know that yet. Supply and demand as they say. And didn't Russia feel at their highest mid June 2008? If it went down then, what will happen now?

Dave78
14-11-2009, 15:06
Yes, but the part of the equation missing in Russian reality in supply and demand is the fact that a lot of Russians will simply hold out for higher prices.

Especially the people selling their own flats on the secondary market. They FERVENTLY BELIEVE their flat is worth whatever its 2007-08 price was and they don't want to *gasp* LOSE MONEY!

Most of these people will sell to get the money to consume not invest.
That means they want to buy another flat, or a dacha, or have money in the bank to spend travelling someday somewhere.

As far as I can tell, they do not think in terms of "If I sell right now, I will have x amount of money and can invest in the stock market as it rebounds from last year, or open my own small business", etc.,etc.

Plain and simple - ordinary Russians can live on very little, therefore selling a flat they happen to have because a child they bought it for married someone else with a flat and so they don't need that one now - they will not starve without selling that flat and so they won't sell it.

It's really ingrained in them. You've seen it in the market place, Russians will stand there in the cold for ages until someone buys at their price, rather than sell fifty of the things at a lower price and actually end up with more money.

In other words, the law of supply and demand does not force people to sell at market prices. It just means that if they do sell, it will be at a market price. So, thousands of empty flats are not actually in the supply side if no-one wants to sell them.

GaNozri
14-11-2009, 15:12
Yes, but a far bigger chunk of the supply side, are developer owned apartments. Different story with them.

Bels
14-11-2009, 15:12
Russian logic eh :) Agreed! I have observed this personality here. Even so prices will go down, it will just take a little longer here.

Dave78
14-11-2009, 15:19
Yes, but a far bigger chunk of the supply side, are developer owned apartments. Different story with them.

Yes, good point.

Allusya
14-11-2009, 21:20
You don't know that yet. Supply and demand as they say. And didn't Russia feel at their highest mid June 2008? If it went down then, what will happen now?

I keep in touch with a couple of real estate agents who have assured me the flat prices in Moscow won't decrease due to a large number of jobless people coming to Moscow for work from all parts of Russia. :(

Bels
14-11-2009, 21:30
Believe me i am not an agent, as a matter of fact I am looking into buying right now; and went to construction yards in and outside the moscow ring and you know what : the 2-room and 3-room flats in new buildings sell like HOT PIES.
The people today are not buying on bank loans, they are buying on cash they have at hand - or via cash they get from relatives. And there are plenty of people with cash in Moscow. Much more than there are flats available.

Then those with cash should wait. Especially if it is for an investment purpose. Very and extremely dodgy at the moment. Those who are buying for investment will soon discover they are losing out. The buyer's market has not yet arrived. And this my opinion only. Do not buy property at the moment for investment reasons. Yes you need to get a bigger home for your family, and you have a good deal of what fits for what you need ? Go for it. But don't go for investment on an extra property. Wait at least six months.

Unless of course you find a seller accepting 50% of the original price they were selling at.

GaNozri
14-11-2009, 21:31
I keep in touch with a couple of real estate agents who have assured me the flat prices in Moscow won't decrease due to a large number of jobless people coming to Moscow for work from all parts of Russia. :(

And these people will be buying up Moscow real estate at inflated prices? Tell your agents to stay off the vodka, if they can't handle it.

Allusya
14-11-2009, 22:03
And these people will be buying up Moscow real estate at inflated prices? Tell your agents to stay off the vodka, if they can't handle it.

:iagree: As for buying - for sure they won't. Renting is a different case, I really don't think any decrease is expected.

GaNozri
14-11-2009, 22:15
There is a 2 room, 60m2 aprtment on Kotelnicheskaya nab. (the Stalin highrise) advertised on this site for 1000Euros! A year ago, it would have went for at least tripple that.

Allusya
14-11-2009, 22:28
There is a 2 room, 60m2 aprtment on Kotelnicheskaya nab. (the Stalin highrise) advertised on this site for 1000Euros! A year ago, it would have went for at least tripple that.

:eh: It seems to have more to do with one-room apartments since they are always in demand. I was looking for a one-room flat November last year and now I have resumed the search and don't see any great difference in price. So, it depends?

GaNozri
14-11-2009, 22:32
The low-end segment is always the most resilient. High-end apartments have shed an average 50% so far.

Bels
14-11-2009, 22:53
The low-end segment is always the most resilient. High-end apartments have shed an average 50% so far.

HMM! I go for that. the stubborn will come later , they are just a bit slow on what's going on in the real world.

legspreader
15-11-2009, 13:56
International investors can leave Russia in droves. When were they ever that important? But having said that, I agree with Medevedev's speach
the other day, that Russia should diversify it's economy from being oil based and explore other opportunities. Perhaps it's just talk we will see. If it's not and they do action i see further prospects to make money.
How many possible oppotunities in Russia can you name that would benefit from direct investment and favourable government assistance?

Better places to put your money? Legs, i would LOVE to hear you bullish on ANYTHING!! I think you are unable to recommend anything as a buy. Go on, prove me wrong. ;)

Sberbank has told you they are considering laying off 50-75,000 people over the next couple of years? Since when did companies come out with statements like that? How can an organisation possibly know what it's staff needs will be 2 years from now and much more publish them now. Bullshit.

The government doesn't have enough cash? Last time i heard a couple of months ago they still have around 400 billion dollars in hard currency reserves.
Of ourse no central bank in the world has enough to save/buy out it's own banking system. Not even China with it's 2 trillion of dollar reserves. But it's a game of confidence and Russia has more than enough to win the game. But i don't think it will come to that.

You had a pissing contest with someone on this site about the size of the the Russian government's hard currency reserves? Then you definately lost!
The ruble didn't crash and burn.
The Russian banking system didn't collapse.
The Russian central bank is not bankrupt.
And there is still around 400 billion$ in the pot.
That's why the "Contingency Fund" was set up in the first place, for just an event like the one of the last year.

I agree with your point about the corporate sector (you didn't mention 'corporate' but i assume that's what you ment. The Russian consumer is not burdened with so much debt) but the strengthening ruble helps with foreign debt repayment. So i don't see the problem spiriling out of control.

You could be exagerating the fall in demand. Everyone and his dog was saying how demand fell off a cliff at the end of last year and through the early part of '09, that's true it did but the stats. now indicate a recovery is in progress.
The sustainability of that recovery, which was driven by huge fiscal stimulus packages, is down to viable 'Exit Strategies' by the central banks.
At some point they must reduce spending and economies must start to grow again organically. How and when they do so is still open to debate. For me this is the biggest single risk. Will central banks keep loosening fiscal policy and create another bubble or will they tighten too soon and risk a return to recession. The jury is still out.

I am always interested by people who question the market. Like, the situation is REALLy bad but you know what? Prices haven't fallen that much. Guess what? That means the situation is NOT that bad. If it was prices WOULD have fallen harder. It's not rocket science!
Are you kidding me the economy is what it is today because of international investors they lent the money for all development in Russia over the last ten years then bid up asset prices in pursuit of yield.

In terms of diversification would be nice but too many people on the take and too much red tape. Every possible sector of the economy would benefit for more investment and less red tape. But its not going to happen any time soon as a small group of people are making money hand over fist with the status quo at the cost of everyone else.
Hell any wheres a better place to put your money right now. But I’m sitting on cash because people are pouring into assets with no fundamental understanding or support for valuations. But right now US commercial assets are a good bet. But as the old saying goes sometime no action is the best action. I think its far better advice than yours of hopping into the resi market right now.
Bullshit? read the f-ing press release dumbass was in the paper a couple of days ago. Its very simple why sberbank did this its highly inefficient and they are looking at the head counts of their pears in other markets with comparable operations and turn over. It aint rocker science my friend.
$400 billion isn’t pocket change but if things are so good why is the government going to the international bond markets next year for the first time since 98? How much do you think the government is going spend to stabilize the taliati much less the couple hundred odd other monogorods? If there was such confidence in Russia why are groups here having difficulty restructuring their loans….
No I didn’t lose on the banking front. I’ve won the first front where I predicted the government couldn’t defend the ruble if I was wrong it would still be 23 rubles to the dollar. The ruble has been stabilized on high oil prices which even kudrin say are realistic or sustainable. I never said the central bank would crash. I said the system was going have a crises that the government was going to have pour tons of its reserves into to stabilize.

Well every large consumers products group I’ve talked to has said their volumes have fallen to 2007 volumes at best. People are earning less burning through savings and cant get credit. How can demand not fall off a clilff? I like how you just cut and pasted the last part about central bank policies as I’ve seen the same thing in several articles.

Your last statement is extremely ignorant. I know of many many examples of where people would not reduce their sales price to a reasonable level and ended up losing the property to the banks. If they would have sold they would have made some money. But because they wanted what they thought it was worth the lost everything. So I would say peoples ignorance and stupidity is no support for the health of the market.

legspreader
15-11-2009, 14:02
I keep in touch with a couple of real estate agents who have assured me the flat prices in Moscow won't decrease due to a large number of jobless people coming to Moscow for work from all parts of Russia. :(

I think thats wishful thinking for now. that was the case in the past when companies were growing like crazy but its the opposite situation now where i've heard of a lot of people have lost their jobs and could afford living in moscow anymore and had to move home.

drwho
15-11-2009, 14:10
One big sponsor of this nice forum is a letting and property agency, so take any answer to questions of property and prices in the correct context i.e biased and full of large amounts BS!!!

Bels
15-11-2009, 14:16
We are all biased in one way or another. Some of us want the property to go down very low, and some of us want the prices sky high up. But those who believe prices will remain the same or go up over the next few years are in cloud cuckoo land. Or they are desporate in trying to save their jobs and commission.

trebor
15-11-2009, 14:19
Are you kidding me the economy is what it is today because of international investors they lent the money for all development in Russia over the last ten years then bid up asset prices in pursuit of yield.

In terms of diversification would be nice but too many people on the take and too much red tape. Every possible sector of the economy would benefit for more investment and less red tape. But its not going to happen any time soon as a small group of people are making money hand over fist with the status quo at the cost of everyone else.
Hell any wheres a better place to put your money right now. But I’m sitting on cash because people are pouring into assets with no fundamental understanding or support for valuations. But right now US commercial assets are a good bet. But as the old saying goes sometime no action is the best action. I think its far better advice than yours of hopping into the resi market right now.
Bullshit? read the f-ing press release dumbass was in the paper a couple of days ago. Its very simple why sberbank did this its highly inefficient and they are looking at the head counts of their pears in other markets with comparable operations and turn over. It aint rocker science my friend.
$400 billion isn’t pocket change but if things are so good why is the government going to the international bond markets next year for the first time since 98? How much do you think the government is going spend to stabilize the taliati much less the couple hundred odd other monogorods? If there was such confidence in Russia why are groups here having difficulty restructuring their loans….
No I didn’t lose on the banking front. I’ve won the first front where I predicted the government couldn’t defend the ruble if I was wrong it would still be 23 rubles to the dollar. The ruble has been stabilized on high oil prices which even kudrin say are realistic or sustainable. I never said the central bank would crash. I said the system was going have a crises that the government was going to have pour tons of its reserves into to stabilize.

Well every large consumers products group I’ve talked to has said their volumes have fallen to 2007 volumes at best. People are earning less burning through savings and cant get credit. How can demand not fall off a clilff? I like how you just cut and pasted the last part about central bank policies as I’ve seen the same thing in several articles.

Your last statement is extremely ignorant. I know of many many examples of where people would not reduce their sales price to a reasonable level and ended up losing the property to the banks. If they would have sold they would have made some money. But because they wanted what they thought it was worth the lost everything. So I would say peoples ignorance and stupidity is no support for the health of the market.

First, i didn't cut and paste anything those were my words.
Legs, as i've said many times before. We will see who is right.
I'm predicting the situation will be further improved next year. Not just in Russia but globally. I first said about 5 months ago that a recovery could be taking shape and that we might be at the bottom. The evidence at the moment would suggest i was right. Despite you disagreeing with me. The recovery might slow a little but i think it will be sustainable. You obviously take the opposite view

GaNozri
15-11-2009, 14:23
Or, most likely they got a "great deal" in 2007 on their property. It's hard for some to take a loss. I remember losing about $50k in 3 months trading on the ForEx in 1999. I lost all the money, cause I didn't have the discipline to take a loss when I had to.

trebor
15-11-2009, 14:31
We are all biased in one way or another. Some of us want the property to go down very low, and some of us want the prices sky high up. But those who believe prices will remain the same or go up over the next few years are in cloud cuckoo land. Or they are desporate in trying to save their jobs and commission.

Bels, i think you will be eating your words and i'm not relying on a commision or a job. Hell! I'm not even in Russia! :-)

Bels
15-11-2009, 14:37
Bels, i think you will be eating your words and i'm not relying on a commision or a job. Hell! I'm not even in Russia! :-)

Don't take it personal :). I wasn't talking about anyone in particular, and my guess is that Dr Who wasn't referring to you either. So how do you know so much if you don't live in Russia?

trebor
15-11-2009, 14:43
Don't take it personal :). I wasn't talking about anyone in particular, and my guess is that Dr Who wasn't referring to you either. So how do you know so much if you don't live in Russia?


Bels, no one is taking anything personaly. Did you see the smiley at the end of the sentance? ;)
I have never claimed to be genius either. What i have written is just my opinion.
Having said that, i do try to keep up with things via the news and friends in Moscow.

legspreader
15-11-2009, 14:43
First, i didn't cut and paste anything those were my words.
Legs, as i've said many times before. We will see who is right.
I'm predicting the situation will be further improved next year. Not just in Russia but globally. I first said about 5 months ago that a recovery could be taking shape and that we might be at the bottom. The evidence at the moment would suggest i was right. Despite you disagreeing with me. The recovery might slow a little but i think it will be sustainable. You obviously take the opposite view

what evidence medvev saying we might be there....

GaNozri
15-11-2009, 14:47
I think you are both right. Only, I believe that whatever recovery, whenever it occurs, will not have any direct impact on the Moscow property market. It is an animal of its own, with own problems and bubbles, which have to be dealt with regardless of any perceived recovery.

trebor
15-11-2009, 14:49
what evidence medvev saying we might be there....

.......or YOU saying we're not?
I would rather trust him than you with your record of predictions. :)

trebor
15-11-2009, 14:53
I think you are both right. Only, I believe that whatever recovery, whenever it occurs, will not have any direct impact on the Moscow property market. It is an animal of its own, with own problems and bubbles, which have to be dealt with regardless of any perceived recovery.

The Moscow real estate market cannot recover without a recovery in the economy in my opinion. There's also a lot of restructuring to be done with debt ect.
I believe it will be done and a recovery will be underway next year, both in Russia and globaly.

GaNozri
15-11-2009, 15:37
The Moscow real estate market cannot recover without a recovery in the economy in my opinion.

Agree. But paradoxically, a broader economic recovery would not necessarilly translate into a recovery in the Moscow property market.

trebor
15-11-2009, 15:43
Agree. But paradoxically, a broader economic recovery would not necessarilly translate into a recovery in the Moscow property market.

I would like to hear your views on why you think that's the case.

GaNozri
15-11-2009, 18:02
I would like to hear your views on why you think that's the case.

I already did, two posts above.

legspreader
15-11-2009, 20:14
.......or YOU saying we're not?
I would rather trust him than you with your record of predictions. :)

how long have you been here? that has to be the dumbest thing i've ever heard. Just like putin only has a small ruble savings account.

Bels
15-11-2009, 20:21
The Moscow real estate market cannot recover without a recovery in the economy in my opinion. There's also a lot of restructuring to be done with debt ect.
I believe it will be done and a recovery will be underway next year, both in Russia and globaly.

Believe me!! I want to be positive about Russia's recovery over the next year nor the year after but NO! NO! It won't happen, because Russia hasn't yet felt the actual recession yet. It's coming,but it isn't here yet. The recession they have at the momentis is only what they think has happened. But it hasn't really happened yet for Russia.

Bels
15-11-2009, 20:27
how long have you been here? that has to be the dumbest thing i've ever heard. Just like putin only has a small ruble savings account.

As he has stated in all honest truth he is not here. He is in the comfort of Great Britain of whaich appears to be in the process of recovery. Confidence in buying in shops are back there, property purchase and confidence is coming back slowly. But that's different. In Britain they have dropped the interest rate low for house purchasers, and the money is available. special deals are all over the the place for shared buy and rent, What Britain has.Russia doesn't have.

To understand Russia, have to be here, and feel it in reality. Not some so called Econimists in newspapers who often get it wrong in their predictions.

Bels
15-11-2009, 20:38
QUOTE! For Legspreader.


Bels, no one is taking anything personaly. Did you see the smiley at the end of the sentance? ;)
I have never claimed to be genius either. What i have written is just my opinion.
Having said that, i do try to keep up with things via the news and friends in Moscow.

trebor
15-11-2009, 20:46
Believe me!! I want to be positive about Russia's recovery over the next year nor the year after but NO! NO! It won't happen, because Russia hasn't yet felt the actual recession. It coming,but it is not here yet. The recession they have at the momentis only what they think is happened. But it hasn't really happened yet for Russia.

Okay, fine. ;)

trebor
15-11-2009, 20:51
QUOTE! For Legspreader.

No, the quote was for you. If i had wanted to say that to Legspreder i would have done so. :)

Bels
15-11-2009, 20:55
No, the quote was for you. If i had wanted to say that to Legspreder i would have done so. :)

But he asked how long you had been in Russia, in other words he couldn't believe your personal experience here. And of course if you are not here, how can you feel it all.

trebor
15-11-2009, 21:02
As he has stated in all honest truth he is not here. He is in the comfort of Great Britain of whaich appears to be in the process of recovery. Confidence in buying in shops are back there, property purchase and confidence is coming back slowly. But that's different. In Britain they have dropped the interest rate low for house purchasers, and the money is available. special deals are all over the the place for shared buy and rent, What Britain has.Russia doesn't have.

To understand Russia, have to be here, and feel it in reality. Not some so called Econimists in newspapers who often get it wrong in their predictions.

Bels, would you like me to put you in touch with a good English teacher? One who can teach you proper English grammar? ;)

I'm not in the UK, i'm in Thailand.
We shall see who is right or wrong in the fullness of time. :)

trebor
15-11-2009, 21:11
how long have you been here? that has to be the dumbest thing i've ever heard. Just like putin only has a small ruble savings account.

I spent 8 years in Russia. I left last year.

Legs, lets examine again your past record of predictions, shall we?
Oil to fall to 20 bucks a barrel
The ruble to fall to 45 (or more) to the dollar
The Russian government to run out of money
The Russian banking system to collapse
Russian real estate to 'crash and burn'
The Russian bond crisis
And another gem. China to 'go down in flames'

Now those are the dumbest things i've ever heard. You make Medvedev sound like a genius! :rofl:

Bels
15-11-2009, 21:27
Bels, would you like me to put you in touch with a good English teacher? One who can teach you proper English grammar? ;)

I'm not in the UK, i'm in Thailand.
We shall see who is right or wrong in the fullness of time. :)

Where on earth did you get that!! WHAICH! Piss off. Qoute me properly and don't mess with my words. English grammar is what I know know naturally and have also learned formally. Believe me! Now if you want to discuss and relax communicating here in a proper manner you had better watch out.

legspreader
15-11-2009, 21:34
I spent 8 years in Russia. I left last year.

Legs, lets examine again your past record of predictions, shall we?
Oil to fall to 20 bucks a barrel
The ruble to fall to 45 (or more) to the dollar
The Russian government to run out of money
The Russian banking system to collapse
Russian real estate to 'crash and burn'
The Russian bond crisis
And another gem. China to 'go down in flames'

Now those are the dumbest things i've ever heard. You make Medvedev sound like a genius! :rofl:

what ever skippy time will tell. the fact of the matter is i have solid reasoning for my positions and you know what they all still might happen. as has been mentioned in recent posts to this thread the recession hasnt hit here yet.

Plain and simple fact im here and have a fairly good understanding of business and economics. you're in thailand and like repeating what you read in the papers.

trebor
15-11-2009, 21:34
Where on earth did you get that!! WHAICH! Piss off. Qoute me properly and don't mess wth my words.

Should read:

Where did you get that? (WHAICH! unidentifiable) Piss off! Quote me properly and don't mess with my words.

You might consider revising the sentance as parts make no sense.

I should be charging for this! :)

trebor
15-11-2009, 21:41
what ever skippy time will tell. the fact of the matter is i have solid reasoning for my positions and you know what they all still might happen. as has been mentioned in recent posts to this thread the recession hasnt hit here yet.

Plain and simple fact im here and have a fairly good understanding of business and economics. you're in thailand and like repeating what you read in the papers.

I will conceed that as i'm not in Russia it is more difficult for me to keep on top of events but i do have friends in business development there.
I don't read the papers that much but i do look at Bloomberg and CNBC.

Yes, time will tell!

is4fun
15-11-2009, 21:46
I recon some English teachers have fat fingers and have a problem navigating the keyboard is all. When one is motivated to express themselves in a moment of profound discovery, the hand squanders and the finger tips leave their intended target only to find the adjacent or wrong key. No worry Bells, I do it all the time. Keep on teaching En:thumbsup:glish.

Bels
15-11-2009, 21:48
Should read:

Where did you get that? (WHAICH! unidentifiable) Piss off! Quote me properly and don't mess with my words.

You might consider revising the sentance as parts make no sense.
As parts don't make any sense????



I should be charging for this! :)

For example you might watch your spelling for sentence. It's not sentance

trebor
15-11-2009, 21:53
For example you might watch your spelling for sentence. It's not sentance

Ah, but i'm not an English teacher. ;)

Bels
15-11-2009, 22:01
Ah, but i'm not an English teacher. ;)

So it's ok for you and everybody to type wrongly, but it's not ok for me? We are talking about flats. And as you you have failed in your fantastic knowledge, you wish to attack somewhere else, is that correct. You have been proven wrong, and now you are upset. So now you want to hit someone else in another subject. Where on earth am I talking about being a teacher, of which is my family's survival in Russia on this particular thread.

I am talking about the value of flats. Not English as a second language in teaching.

Let's be fair, you have been beaten by many here on an argument about property value in Russia, now you are hitting at arguments of which don't belong on this thread.

You're hitting at threads. You are looking for a way out, and you feel cornered like a rat.

Judge
15-11-2009, 22:04
as has been mentioned in recent posts to this thread the recession hasnt hit here yet.



The recession came and went here...:D

GaNozri
15-11-2009, 22:08
The recession came and went here...:D

It must've been the recession finishing off my tequila supply. The sneaky biatch!

Bels
15-11-2009, 22:16
The recession came and went here...:D

Let's hope so. But?

trebor
15-11-2009, 22:18
So it's ok for you and everybody to type wrongly, but it's not ok for me? We are talking about flats. And as you you have failed in your fantastic knowledge, you wish to attack somewhere else, is that correct. You have been proven wrong, and now you are upset. So now you want to hit someone else in another subject. Where on earth am I talking about being a teacher, of which is my family's survival in Russia on this particular thread.

I am talking about the value of flats. Not Enflish as a second language in teaching.

Let's be fair, you have been beaten by many here on an argument about property value in Russia, now you are hitting at arguments of which don't belong on this thread.

How can someone he proved wrong when we are talking about a prediction for future prices?

Bels
15-11-2009, 22:22
How can someone he proved wrong when we are talking about a prediction for future prices?

He proved wrong? Who proved wrong? Me, legspreader? whom. The future will tell in a few years time. None of us possess the Chrystal ball. But some of us, especially those living here, know better about Russia rather than the outsiders.

trebor
15-11-2009, 22:26
........You have been proven wrong........

Where have i been proven wrong?

Bels
15-11-2009, 23:06
Give it time. :) I am looking through my chrystall ball now :)

trebor
15-11-2009, 23:11
Give it time. :) I am looking through my chrystall ball now :)

Reminds me of an old joke.
How do Gypsies avoid pregnancy? The men have crystal balls and can see it coming.

kebab
23-11-2009, 13:26
Look without doubt Moscow flat prices have dropped, but like other markets the UK included no one wants to say its that bad. They look at any little sign as an indication that the housing slump is over.
I can only say I sold my flat earlier in the year and I recently checked the price via an online quote irn.ru - not accurate yes but I was comparing the price to 6 months earlier. The price they estimated my flat to be worth was less than I sold it for, so prices have dropped considerably as it was valued at around $60,000 more. I am not saying the quote was accurate but it indicates that prices have come down even on official sites.

legspreader
23-11-2009, 13:34
Where have i been proven wrong?

where have you been right?

trebor
23-11-2009, 16:11
where have you been right?

Months ago i said we are at or near the bottom, not just in Russia but around the world. Looks like i was right.
Months ago i said things will get better. Again, not just in Russia but around the world.
They have.

legspreader
23-11-2009, 16:17
Months ago i said we are at or near the bottom, not just in Russia but around the world. Looks like i was right.
Months ago i said things will get better. Again, not just in Russia but around the world.
They have.

yes along with lots of other people in the press. but those same people in the press are saying that wait a second we might not be out of this after all. So you havent been proven right just like many of my predcitions arent wrong yet either.

trebor
23-11-2009, 17:08
yes along with lots of other people in the press. but those same people in the press are saying that wait a second we might not be out of this after all. So you havent been proven right just like many of my predcitions arent wrong yet either.

The consensus on Bloomberg, CNBC etc. is that the recovery will be slow.
Note, THE RECOVERY.
Months ago people were debating whether there was in fact a recovery.
You were one of them.
Conclusion? A recovery has occurred. Things HAVE got better, therefore i was right.
Is it sustainable? Let's see. I believe it will be.
You obviously don't.

So, you still think oil will drop to 20 bucks a barrel?
The ruble will plunge to 45+ to the dollar?
The Russian government will default?
The Russian banking system will collapse?
There will be a Russian corporate bond crisis?
Russian real estate will crash and burn?

There's a very old saying. When you're in a hole stop digging! ;)

legspreader
23-11-2009, 17:23
The consensus on Bloomberg, CNBC etc. is that the recovery will be slow.
Note, THE RECOVERY.
Months ago people were debating whether there was in fact a recovery.
You were one of them.
Conclusion? A recovery has occurred. Things HAVE got better, therefore i was right.
Is it sustainable? Let's see. I believe it will be.
You obviously don't.

So, you still think oil will drop to 20 bucks a barrel?
The ruble will plunge to 45+ to the dollar?
The Russian government will default?
The Russian banking system will collapse?
There will be a Russian corporate bond crisis?
Russian real estate will crash and burn?

There's a very old saying. When you're in a hole stop digging! ;)

blah blah blah. The ruble is direclty tied to oil pricing that even kudrin ways is way out of line with reality. If you look at historic data the world is swimming in unprecidented oversupply and glut. This is countered by speculative buying and hedges vs the dollar.

When did i ever say the russian goverment would defualt? Thats right never. In terms of the banking system going down the toliet we're slowly moving towards that end at the moment. Funny you should mention real estate as thats whats going to hamstring all the banks as they have $10 billions if not hundreds of billions of real estate assest on their books that are worth less than half of what they're worth or they recongnize them at on top of that more and more developers are going bye bye if you dont consider that going down the tubes I can understand your optomistic view of things here.

Russian companies are being crushed right now in terms of access to capital and ability to repay loans. Yes many have been able to restructure debt but at huge premiums.

I know you dont want to admit it but if you ask others that understand whats going on I'm not that far off on most things. Things are no where as rosey here in russia as the media trys to portray full stop.

But i must admit that it does give me a chuckle that a chef living a half a world away is trying to lecture me on ecnomics and business in russia....

trebor
23-11-2009, 17:34
But i must admit that it does give me a chuckle that a chef living a half a world away is trying to lecture me on ecnomics and business in russia....

Because you are wrong and as time goes on it's going to get worse for you.
Legs, do yourself a favour. Stop trying to impress us all by second guessing the Russian economy.
Just switch on Bloomberg and leave it to the experts. You might get a few predictions right. :rofl:

legspreader
23-11-2009, 17:39
Because you are wrong and as time goes on it's going to get worse for you.
Legs, do yourself a favour. Stop trying to impress us all by second guessing the Russian economy.
Just switch on Bloomberg and leave it to the experts. You might get a few predictions right. :rofl:

How am i wrong about anything i just wrote? oh and bloomberg is starting to talk along my lines on various subjects including china and asset bubbles.

trebor
23-11-2009, 17:52
My answer:


...........The ruble is direclty tied to oil pricing that even kudrin ways is way out of line with reality. If you look at historic data the world is swimming in unprecidented oversupply and glut. This is countered by speculative buying and hedges vs the dollar..........

Basically an admission you got it wrong

.......In terms of the banking system going down the toliet we're slowly moving towards that end at the moment................

So, you're sticking by your original prediction. The banking system will collapse

..........Funny you should mention real estate as thats whats going to hamstring all the banks as they have $10 billions if not hundreds of billions of real estate assest on their books that are worth less than half of what they're worth or they recongnize them at on top of that more and more developers are going bye bye if you dont consider that going down the tubes I can understand your optomistic view of things here...............

'Crash and burn' was the original phrase you used. Not, 'Going down the tubes'
Big difference. Unless you would like to admit you got it wrong.

...........Russian companies are being crushed right now in terms of access to capital and ability to repay loans. Yes many have been able to restructure debt but at huge premiums...............

Again, basically you're admitting you called it wrong. Unless you're still saying there will be a default crisis

trebor
23-11-2009, 17:58
.................and bloomberg is starting to talk along my lines on various subjects including china and asset bubbles.

I heard of the risk of a China asset bubble months ago. However, i haven't heard anyone predicting China will 'go down in flames'
We shall see.

legspreader
23-11-2009, 18:11
My answer:

Give it up and stop trying to put words in my mouth. Why dont you admit you have no clue regarding business and are reciting what you read. You might think I'm wrong but my arguements like it or not are fairly sound...

trebor
23-11-2009, 18:49
Give it up and stop trying to put words in my mouth. Why dont you admit you have no clue regarding business and are reciting what you read. You might think I'm wrong but my arguements like it or not are fairly sound...

I check the business news for information, just like most people. One still has to make a decision as to which side of the argument you want to position yourself. Summing up after all i hear, i called it right. There was a recovery. You said there wasn't so you're wrong.
I have never questioned your arguments. Just your conclusions. As i have said many times before, you exaggerate the risks by making wild claims that are overly pessamistic. You have admitted this yourself.

Oil has not hit 20 bucks a barrel. FACT
Ruble has not dropped to 45+ to the dollar. FACT
Russian government has not run out of money. FACT
Russian banking system has not collapsed. FACT
There has been no bond crisis. FACT
Russian real estate has not 'crashed and burned' FACT

I'll stick to listening to the experts on Bloomberg! :11158:

legspreader
24-11-2009, 10:31
I check the business news for information, just like most people. One still has to make a decision as to which side of the argument you want to position yourself. Summing up after all i hear, i called it right. There was a recovery. You said there wasn't so you're wrong.
I have never questioned your arguments. Just your conclusions. As i have said many times before, you exaggerate the risks by making wild claims that are overly pessamistic. You have admitted this yourself.

Oil has not hit 20 bucks a barrel. FACT
Ruble has not dropped to 45+ to the dollar. FACT
Russian government has not run out of money. FACT
Russian banking system has not collapsed. FACT
There has been no bond crisis. FACT
Russian real estate has not 'crashed and burned' FACT

I'll stick to listening to the experts on Bloomberg! :11158:


Thats where youre really off. All my preditions were more than probable in fact they were probaly on a razors edge at any point but that being said things can swing back the other way as well. Oil price isnt reacting to any kind of reality and not trading on fundamentals also a fact. Ruble is tied to the price of oil so had tracked it upwards also a fact. The Russian goverment didnt run out of money because it continues to step away from what it promises to support financially also a fact. If they had stuck to their original crisis plan to the end they'd be broke right now. The fact they have situations such as the monogorods and avtovaz dont instill warm and fuzzy feelings about their finances either. On the banking front things are coming my friend. Russian commerical real estate is in flames my friend and tied to why the banks are going to get the old talcum tap.

The market controls information and if you just read the press of course things look ok. However, I work in the market talk to banks developers and have a much better picture of whats going on.

legspreader
24-11-2009, 10:44
heres why the whole house of cards is going to come done. Everything is powering ahead on stimulus and chinas "recovery". But its an illussion. They're lending billions that are spurring GDP that they'll never get back.



China Banks Said to Submit Capital Raising Plans to Regulator - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=aRmJ2Kl8coOA)

trebor
24-11-2009, 13:33
Thats where youre really off. All my preditions were more than probable in fact they were probaly on a razors edge at any point but that being said things can swing back the other way as well. Oil price isnt reacting to any kind of reality and not trading on fundamentals also a fact. Ruble is tied to the price of oil so had tracked it upwards also a fact. The Russian goverment didnt run out of money because it continues to step away from what it promises to support financially also a fact. If they had stuck to their original crisis plan to the end they'd be broke right now. The fact they have situations such as the monogorods and avtovaz dont instill warm and fuzzy feelings about their finances either. On the banking front things are coming my friend. Russian commerical real estate is in flames my friend and tied to why the banks are going to get the old talcum tap.

The market controls information and if you just read the press of course things look ok. However, I work in the market talk to banks developers and have a much better picture of whats going on.

As i have said many times, i have no truck with your views, just your conclusions. Just because a risk is evident does not mean it will materialise.
In my experience all probables do not always turn into actuals. You were of the belief that all the worst case scenarios would become a reality. I wasn't.
I also don't believe things were as close as you believe.
The Russian government is still sitting on reserves of around 400 billion dollars. Still the 3rd. largest in the world? Hardly that close to disaster is it?
The price of oil is not behaving on fundamentals? Did that come as a suprise to you? It wasn't acting on fundamentals on the way up to 147 bucks a barrel so why should the price not be acting on some speculation now. You could be called naive for not considering that. Same can be said for the ruble.
The government promised they were going to defend on all fronts and you believed them? ALL governments do the same. They have to. They say they will defend a situation to try to relieve the selling. If it's not working out they will about face. To do anything else would be suicidal. You can see this all the time, especially in the currency markets. The Fed are experts!
Again, you could be called naive for not considering that either.
Also, the fact that Russia is not transparent works both ways. I remember saying this to you 12 months ago. This leave the way open for Medvedev and Putin to use whatever methods they wish to 'control' the situation. Interpret 'control' anyway you wish!
Again, you didn't consider this?
As for real estate and the banks. Let's see what happens but think the government will negotiate their way through. As they have managed to do so far.

trebor
24-11-2009, 13:39
heres why the whole house of cards is going to come done. Everything is powering ahead on stimulus and chinas "recovery". But its an illussion. They're lending billions that are spurring GDP that they'll never get back.



China Banks Said to Submit Capital Raising Plans to Regulator - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=aRmJ2Kl8coOA)

Again, the risks are there. I'm not arguing with you on that front. Doesn't mean though that the worstcase scenario ALWAYS comes to pass.

legspreader
25-11-2009, 10:14
Again, the risks are there. I'm not arguing with you on that front. Doesn't mean though that the worstcase scenario ALWAYS comes to pass.

nor does hoping for the best case senario make it come to pass. Though i will concede that positive sentiment can hold back the worse case scenario. but this doesnt change the underlying flaws and weakness....

legspreader
25-11-2009, 18:30
Russia Stocks Fall 2nd Day as Kudrin Says Market ‘Overheated’ - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601095&sid=ak3xGUAxiSDk)

trebor
25-11-2009, 21:20
Russia Stocks Fall 2nd Day as Kudrin Says Market ‘Overheated’ - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601095&sid=ak3xGUAxiSDk)

Russia's Micex Index is up over 100% this year. A lot of the speculative money inflows have helped to push the ruble higher. This is not a good situation for a Russian rocovery.
Not suprising then that the powers that be are trying to cool the situation.

Legs, if you wish hard enough if might happen!! :p

Bels
25-11-2009, 21:36
Let us get back to flat prices currently in Moscow. For renting and value :)
Where are prices going to go over the next five years. Not only look in so called newspapers, listen to the people complaining about the wages being far too low, and the prices continuing to rise in essentials such as food, electricity, gas, clothes, etc? THey are struggling for sure. The majority of people in Russia. So I don't care what you paper news states, reality is different.

No spenders in propert, no money, NO INCREASE! And a serious drop in value of all properties very soon., Perhaps even a Russian revolt, if the prices continue to rise, and wage continue the same, or even worse massive unemployment!

For goodness sake!! Where are you coming from!! I see it and feel it!! Whay are you not feeling the same. You don't need this crap from papers, including the Moscow Times. Especially the Moscow Times! It's full of !!!!

Dave78
25-11-2009, 22:42
I agree - The Moscow Times is full of exclamation points!!!!!!!!!!!!!!!!!!!!!!!!////!!!!!!

legspreader
01-12-2009, 21:14
This touches on some of what ive been saying for awhile now...

in-wake-of-dubai-trying-to-predict-the-next-blowup: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/real-estate/article/108269/in-wake-of-dubai-trying-to-predict-the-next-blowup?sec=topStories&pos=4&asset=&ccode=)

Bels
01-12-2009, 22:40
This touches on some of what ive been saying for awhile now...

in-wake-of-dubai-trying-to-predict-the-next-blowup: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/real-estate/article/108269/in-wake-of-dubai-trying-to-predict-the-next-blowup?sec=topStories&pos=4&asset=&ccode=)

Hey legspreader! What other interests do you have apart from Finance, economics, and property prices? How about a bit of fun? Enjoying yourself. What are your other personal interests in life? I can't see you around here writing something just for fun. Lighten up and enjoy yourself.

Or at least try and wind up another member on another subject just for fun, such as cafe or LOL! LOL! Current Affairs. Just give it a go on another subject. as it can be sometimes. Boy do some get angry :) ?

Judge
01-12-2009, 23:06
This touches on some of what ive been saying for awhile now...

in-wake-of-dubai-trying-to-predict-the-next-blowup: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/real-estate/article/108269/in-wake-of-dubai-trying-to-predict-the-next-blowup?sec=topStories&pos=4&asset=&ccode=)


Good read was that..

We could hold a sweepstakes to see which country will ''blowup'' next.
Iceland already down,Now Dubai....

My money is on one of the Baltic countries..

Bels
01-12-2009, 23:17
LoL! I tahnked Judge on a good post , and yet again I Got the message, Bels! Aren't allowed to do this!! You don't have the privelidge to thank another member. You are not allowed to do this Or in so many words. The actual wording is much worse, and would terrify newbies. And all I did was thank someone, and in my own thread!

LOL! Newbies given such messages would put them off of expat.ru for good.

Judge
01-12-2009, 23:45
It shows that you thanked my post..

trebor
01-12-2009, 23:59
...............My money is on one of the Baltic countries..

Be careful what you wish for ;)

Bels
02-12-2009, 00:16
It shows that you thanked my post..

That's the funny thing. What I am not allowed to do, is done anyway. Once I go to the next post.

But what worries me, are newbies terrified of such notices. Newbies ignore it! It is probably a cookie problem setting in your browser, which can be fixed, if you are that bothred.

GaNozri
02-12-2009, 00:19
Good read was that..

We could hold a sweepstakes to see which country will ''blowup'' next.
Iceland already down,Now Dubai....

My money is on one of the Baltic countries..

Esttttttonnnnnnia!

AndreyS
02-12-2009, 00:40
Latvia?

I have some good partners there.

Judge
02-12-2009, 01:38
It's a toss up between Latvia and Estonia..The situation doesn't look good in Latvia..
Thousands of students protest Latvia's crisis cuts: police - Â*Latest news around the world and developments close to home - MSN Philippines News (http://news.ph.msn.com/business/article.aspx?cp-documentid=3727333)
Students protesting is always a bad sign,if workers join the students then Latvia will be on the brink of collaspe.
Andrey,what do your partners say?I was told that hospitals/schools have been closed and some people are living off the forest.

AndreyS
02-12-2009, 02:35
I will ask them about the situation tomorrow, in the course of discussing terms of our next contract.

legspreader
02-12-2009, 10:54
Hey legspreader! What other interests do you have apart from Finance, economics, and property prices? How about a bit of fun? Enjoying yourself. What are your other personal interests in life? I can't see you around here writing something just for fun. Lighten up and enjoy yourself.

Or at least try and wind up another member on another subject just for fun, such as cafe or LOL! LOL! Current Affairs. Just give it a go on another subject. as it can be sometimes. Boy do some get angry :) ?

I know I tend to troll these forums. A buddy and his girlfriend were on a tranvey a couple of years ago and she asked the same question. So you're good friends with him what does hes like. He things for a second and responds money, girls and partying. She responds a bit confused thats its. He thinks a second and say yeah that pretty much covers it. This was all in Russian and a guy next to them who was listening chimes in with a tak styashi ruski chelovek ;)

do have some other interest but they do get a bit lost. Dont party like I use to, back to school, and back to the gym...

legspreader
02-12-2009, 10:57
Good read was that..

We could hold a sweepstakes to see which country will ''blowup'' next.
Iceland already down,Now Dubai....

My money is on one of the Baltic countries..

I like betting on long shot dark horses. The baltics are obvious I like china....

Judge
02-12-2009, 12:44
I like betting on long shot dark horses. The baltics are obvious I like china....

Isn't China the country that is suppose to save us all ?

legspreader
02-12-2009, 17:28
Isn't China the country that is suppose to save us all ?

Yep thats why I said a dark horse but the warning signs are out there. Their stimulas has almost all been through goverment forced lending vs actual hard currency spending by the central goverments in most countries, the majority of the spending has gone to hard assets and production capacity steel, aluminum, concrete buildings ect. These are one off injections of capital and are going to create huge over capacities when it all comes on line. It also creates asset bubbels in stock market in real estate. Where did their huge consumer spending boom come from yes thats right easy credit, think what happened in russia but much much worse. I read an article several years ago that the employement and income checks by chinesse banks were a joke a few years ago likely much worse when they opened the credit flood gates. So a very large chunk on that debt will be bad debt. Oh yeah those global demand for goods that china needs aint coming back any time soon. Also the flood of money into pushs the limits even further as people bet on a yaun appreication but like people were piling into the ruble precrisis for the same reason.

But as trebor likes to tell me I could be wrong...

Judge
03-12-2009, 05:00
I'm not sure, China is sitting on $2.3 trillion in reserves .This is a huge amount of money which can solve alot of problems if need be.If China sees alot of bad debt they have the money to cover the debt of its people,bail out banks and businesses.

legspreader
03-12-2009, 10:28
I'm not sure, China is sitting on $2.3 trillion in reserves .This is a huge amount of money which can solve alot of problems if need be.If China sees alot of bad debt they have the money to cover the debt of its people,bail out banks and businesses.

Yes they have a lot of reserves but also alot of people and lots and lots of questionable accounting practices....

legspreader
03-12-2009, 12:01
Russian Bank Lending Declines Amid Increase in Delinquent Debt Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Paul Abelsky

Dec. 3 (Bloomberg) -- Russian banks cut lending to businesses and consumers in October even after the central bank continued cutting its key interest rates in a bid to ease credit flows amid the economy’s steepest decline on record.

Lenders’ corporate loan books fell 0.5 percent from September, when the monthly decline was 0.7 percent, according to data published on the central bank’s Web site today. Lending to consumers dropped 0.7 percent for a ninth consecutive monthly decline. The financial industry’s total assets fell 0.6 percent, while total equity capital advanced 3.1 percent.

Bank Rossii has reduced interest rates nine times this year, with the refinancing rate reaching a record low of 9 percent on Nov. 25. The share of overdue corporate loans rose to 5.9 percent in October from 5.6 percent the previous month, central bank data show. The percentage for consumer lending increased to 6.6 percent from 6.4 percent.

legspreader
03-12-2009, 12:41
heres another one back to china

China Works on ‘Feasible’ Plan to Cut Steel Capacity (Update2) - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=aeNxe..O5Xdc)

Bels
03-12-2009, 23:03
I know I tend to troll these forums. A buddy and his girlfriend were on a tranvey a couple of years ago and she asked the same question. So you're good friends with him what does hes like. He things for a second and responds money, girls and partying. She responds a bit confused thats its. He thinks a second and say yeah that pretty much covers it. This was all in Russian and a guy next to them who was listening chimes in with a tak styashi ruski chelovek ;)

do have some other interest but they do get a bit lost. Dont party like I use to, back to school, and back to the gym...

OK Legspreader I am going to place you as our most famous Native English speaking finance geek of Russia. We have probably got thousands of computers geeks all over the world, and possibly about ten computer geeks here in expat.ru. But you are our one and only Finance, geek, interested in in only one thing Finance!! How about geting rich and just having fun with the money? Now that's what I would love doing. Forget the research. I f I had it, would blow it . and let my family and me have a fantastic time. I certainly wouldn't be boring myself studying the Financial Times all day and every day.

legspreader
09-12-2009, 10:04
another developer bites the dust.

VTB bank takes control of Sistema Hals for just 30 roubles
by admin on December 3, 2009

| More By Marcus Williams

State-controlled VTB Bank has exercised a call option to acquire 31.5 % of property developer Sistema-Hals from the diversified conglomerate group Sistema for a symbolic price of just 30 roubles.

Sistema-Hals and its parent have been heavily indebted to VTB, and agreed earlier this year to give VTB a 19.5% stake and a call option for a further 31.5%. In return, Sistema no longer holds any liability for the loans that Sistema-Hals took from VTB.

Under the terms of their agreement the partners intend to restructure the debt of Sistema-Hals to VTB. The partners have also agreed the terms governing the implementation of a number of joint investment projects.

Leonid Melamed, president and chief executive of Sistema, said in a statement: “Our strategic partnership with VTB Bank provides a platform for a productive development of Sistema-Hals and the increase of its asset value. We continue to see great potential in the Russian real estate sector and will participate in the management of Sistema-Hals as we remain one of the key shareholders.”

pettingman
11-12-2009, 18:18
Hello everyone!

I have a friend from RT. She rent apartment with 2 bedrooms for 90.000 rubles because they have so stuped agent. I was helping with solving that problem to her. Finally we found great agent whose name is Nikita. He also does speak English. I can't say that good enough, but he can help with that.
He found us studio for just 40 000 rubles and took just 60% agent commission.
That studio is 5 minutes away by walk from New Arbat and near by US embassy.

in case you want to change your apartment or coming soon to Moscow, you can call him at +79166123115, +79055440102

Tell him that you calling from me (Ruslan) and Staci, he should to get who are you talking about!:tgif:

Bels
11-12-2009, 20:50
Hello everyone!

I have a friend from RT. She rent apartment with 2 bedrooms for 90.000 rubles because they have so stuped agent. I was helping with solving that problem to her. Finally we found great agent whose name is Nikita. He also does speak English. I can't say that good enough, but he can help with that.
He found us studio for just 40 000 rubles and took just 60% agent commission.
That studio is 5 minutes away by walk from New Arbat and near by US embassy.

in case you want to change your apartment or coming soon to Moscow, you can call him at +79166123115, +79055440102

Tell him that you calling from me (Ruslan) and Staci, he should to get who are you talking about!:tgif:

LOL stupid individual more likely. And also very rich. But the rich are not generally stupid. Therfore I don't believe you. Yes stupid, stupid, and stupid. And the rich are not stupid. give them some respect! How did they become rich? Because they were not stupid. So don't kid us with your stories.

As yoo will see from expat.ru. we try to back up our facts with factual links. You have given no such proof with your claims therefore I don't believe you.

The last flat I rented was last year, of which I needed to use as a classroom. I thought it was too high at the rate of 18.000 roubles per month. I found this rate too high. Thankfully I eventually I got eventually a goernment classroom within a government building, costing much less.

Please don't take the piss!~ As we know hoe to read what the market rate really is. And many expats are not as rich as you think. And they are certainly not so stupid as you appear to imply.

Don't try to raise prices, especially when there is longer money floating around. Price and demand is what I say. Not stupid price claims.

AndreyS
11-12-2009, 21:46
Agree with Bels. I think if somebody pays extra-high rents, it has nothing to do with them being stupid. There is always a reason, they just want to spend their money that way. They can overpay just because they like the flat, the neighbourhood etc.
I think Ruslan himself is the agent he talks about and being a newbie tries to advertise his own services in this unusual way... And good luck to him! ;-)

Bels
11-12-2009, 22:10
Agree with Bels. I think if somebody pays extra-high rents, it has nothing to do with them being stupid. There is always a reason, they just want to spend their money that way. They can overpay just because they like the flat, the neighbourhood etc.
I think Ruslan himself is the agent he talks about and being a newbie tries to advertise his own services in this unusual way... And good luck to him! ;-)

Yes god luck. Let all agents try to fabricate prices of which have been untrue since 1997. How long wil this fabrication last? Whaen the launderers have disappeared of course. And they have done that. They have now disapeared.

So now we have the real buyers, and those real buyers are getting lousy offers for mortgages, and often refused now. The real buyers find that they can only pay mainly in cash. And how many real buyers are there in in a recession? It is now a buyers market to search and buy cheap.

From this! Those wo rent also have gained the strength of at last being able to shop around and getting the real rent costs in Moscow. A fraction of the cost per month compared to what it was a year ago for example.

Good news for the individual buyer or those who want to rent I say!

trebor
12-12-2009, 00:58
...........It is now a buyers market to search and buy cheap..............Good news for the individual buyer or those who want to rent I say!

Are you now agreeing with me Bels, when i said awhile back that it might be a good time to buy? ;)

legspreader
12-12-2009, 21:58
Hello everyone!

I have a friend from RT. She rent apartment with 2 bedrooms for 90.000 rubles because they have so stuped agent. I was helping with solving that problem to her. Finally we found great agent whose name is Nikita. He also does speak English. I can't say that good enough, but he can help with that.
He found us studio for just 40 000 rubles and took just 60% agent commission.
That studio is 5 minutes away by walk from New Arbat and near by US embassy.

in case you want to change your apartment or coming soon to Moscow, you can call him at +79166123115, +79055440102

Tell him that you calling from me (Ruslan) and Staci, he should to get who are you talking about!:tgif:

I hate to break it to you 40,000 rubles for a studio is not exactly a bargain...

legspreader
18-12-2009, 10:14
the house of cards continues to grown and teeter...

‘Sizzling’ Shanghai Homes Defy Tax, Bubble Concerns (Update1) - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=aqiNuxetDZbg)

Academy
18-12-2009, 17:31
As yoo will see from expat.ru. we try to back up our facts with factual links...
The last flat I rented was last year, of which I needed to use as a classroom. I thought it was too high at the rate of 18.000 roubles per month... Thankfully I eventually got a goernment classroom costing much less.


I didn't think there were any such prices left in Moscow. Certainly not near Novi Arbat, which was where the RUR40 000 place was. Then again, perhaps I've been mistaken.

Can you please provide a link/phone number of some kind to an agent or vendor of any kind who can provide an apartment for this kind of money?

legspreader
22-12-2009, 16:52
China’s Speeding Bullet-Train Program May Brake Economic Growth - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=aFw2m.3un3dk)

and some more of what i've been talking about and why things might getting still dicier yet on the world stage.



Investment in fixed assets such as factories and the rail network accounted for more than 95 percent of China’s 7.7 percent growth in the first three quarters of 2009 and made up 45 percent of gross domestic product, which is higher than any major economy in history, according to Morgan Stanley Asia Chairman Stephen Roach.

‘Ridiculous, Unsustainable’

Without a surge in consumer spending and with export growth stalled, investment must rise even further to stoke growth, he said in a Dec. 18 Beijing speech.

“These are ridiculous, unsustainable numbers for any economy,” he said.

China may be hit with a slowdown next year as the impact of the investment-led expansion wears off and shipments to the U.S., the traditional external source of growth, fail to pick up, Roach said in an October report. He didn’t specify how much growth might slow.

Dave78
22-12-2009, 17:25
So, back to the subject at hand, what should I pay for a modest but decent one or two room flat near the metros Aeroport or Sokol?

GaNozri
22-12-2009, 20:05
So, back to the subject at hand, what should I pay for a modest but decent one or two room flat near the metros Aeroport or Sokol?

Whatever the real estate agents will be able to suck out of you.

legspreader
31-12-2009, 10:19
This sounds faimiliar...

China Property Bubble May Lead to U.S.-Style Real Estate Slump - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601089&sid=arp0XyPoRxW0)

Bels
31-12-2009, 18:54
Whatever the real estate agents will be able to suck out of you.

Agreed! And all down to bidding and negotiation. I am a big believer to supply and demand. And when I see no demand, and see a high volume of offers, then I see a major drop in price., Supply and demand is what it is all about. It always has been. \Unfortunately for somne, sufficiant demand doesn't exist, hence price goes down.

mrl
05-01-2010, 14:57
I'm looking for an appartment now, mostly on cian.
The prices shown can be negociated, in general you can easily get 10% of discount. And for the commission of the agent, don't accept more than 50%...

legspreader
10-01-2010, 23:00
contrarian-investor-sees-economic-crash-in-china: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-planning)

trebor
10-03-2010, 14:29
Time to revive this old chestnut me thinks.

Some good news in this article for China. Chinese exports jump more than expected.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoaLFG5dVnt0&pos=7

legspreader
10-03-2010, 15:21
Time to revive this old chestnut me thinks.

Some good news in this article for China. Chinese exports jump more than expected.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoaLFG5dVnt0&pos=7

I would say you can trust chinas "official numbers" at as much as you can those put forward by greece over the last several years. but that being said try this one on for size.


http://www.bloomberg.com/apps/news?pid=20601089&sid=a8K__QRxjnQM

Beijing Seen Vacant for 50% Commercial as Chanos Predicts Crash Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Bloomberg News

Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China. He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates.

"I took these pictures to try to impress upon these people the massive amount of oversupply," said Rodman, 63, president of Global Distressed Solutions LLC, which advises private equity and hedge funds on Chinese property and banking. Rodman figures about half of the city's commercial space is vacant, more than was leased in Germany's five biggest office markets in 2009.

Beijing's office vacancy rate of 22.4 percent in the third quarter of last year was the ninth-highest of 103 markets tracked by CB Richard Ellis Group Inc., a real estate broker. Those figures don't include many buildings about to open, such as the city's tallest, the 6.6-billion yuan ($965 million) 74- story China World Tower 3.

Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country's property market is in a bubble.

"There's a monumental property bubble and fixed-asset investment bubble that China has underway right now," Chanos said in a Jan. 25 Bloomberg Television interview. "And deflating that gently will be difficult at best."

Third Costliest

Investor concerns have spread beyond real estate. Among 15 major Asian markets, the benchmark Shanghai Composite Index is valued third-highest relative to estimates for this year's earnings, after Japan and India, even after falling 8.5 percent in the past six months.

A glut of factories in China is "wreaking far-reaching damage on the global economy," stoking trade tensions and raising the risk of bad loans, the European Union Chamber of Commerce in China said in November.

More than 60 percent of investors surveyed by Bloomberg on Jan. 19 said they viewed China as a bubble, and three in 10 said it posed the greatest downside risk. The quarterly poll interviewed a random sample of 873 Bloomberg subscribers and had a margin of error of 3.3 percentage points.

Digesting the debt from a popped property bubble may slash bank lending and drag growth lower for years in an economy that Nomura Holdings Inc., Japan's biggest brokerage, says will provide more than a third of world growth in 2010.

The risks are so great that a decade of little or no growth, as Japan experienced in the 1990s, can't be dismissed, said Patrick Chovanec, an associate professor in the School of Economics and Management at Beijing's Tsinghua University, ranked China's top university by the Times newspaper in London.

'Astronomical Rates'

The Nikkei 225 Stock Average surged sixfold and commercial property prices in metropolitan Tokyo rose fourfold before the bubble burst in 1990. The Nikkei trades at about a quarter of its December 1989 peak.

"You have state-owned enterprises using borrowed funds from the stimulus bidding up the price of land -- not even desirable plots of land -- in Beijing to astronomical rates," Chovanec said. "At the same time you have 30 percent-plus vacancy rates and slumping rents in commercial property so it's just a case of when you recognize the losses -- or don't."

China's lending surged to 1.39 trillion yuan in January, more than in the previous three months combined. Property prices in 70 cities climbed 9.5 percent from a year earlier, the most in 21 months.

Reasonable Control

Policy makers are starting to rein in the loans that helped fuel the property boom. Banks should "strictly" follow real estate lending policies, the China Banking Regulatory Commission said on its Web site on Jan. 27. It called for banks to "reasonably control" lending growth.

"The liquidity bubble last year went to the property market," said Taizo Ishida, San Francisco-based lead manager for the $212-million Matthews Asia Pacific Fund, in a phone interview. "I was in Shanghai and Shenzhen three weeks ago and the prices were just eye-popping, just really amazing. Generally I'm not buying Chinese stocks."

Chanos, founder of New York-based Kynikos Associates Ltd., predicted that China could be "Dubai times 100 or 1,000." Real estate prices there have fallen almost 50 percent from their 2008 peak as the emirate struggles under at least $80 billion of debt. The economy may shrink 0.4 percent this year, Shuaa Capital, the biggest U.A.E. investment bank, says.

The commercial property space under construction in China at the end of November was the equivalent of 6,800 Burj Khalifas -- the 160-story Dubai skyscraper that's the world's tallest.

Industrial Loans

It's difficult to determine how exposed Chinese banks are to real estate debt because loans booked to some state-owned companies as industrial lending may have been used to invest in property, say Xie and Charlene Chu, who analyzes Chinese banks for London-based Fitch Ratings Ltd. in Beijing.

A downturn in the property market may be accompanied by a surge in nonperforming loans. The Shanghai office of the banking regulatory commission said on Feb. 4 that a 10 percent fall in property values would triple the ratio of delinquent mortgages there.

Shares of Industrial & Commercial Bank of China Ltd., the world's largest bank by market capitalization, are down 13 percent this year. China Construction Bank Corp., the second- largest, has fallen 10.2 percent. Both are based in Beijing. The Shanghai index is down 9 percent.

Fund manager Joseph Zeng says he has a contrarian view on China's banks, on the grounds that rising interest rates this year will benefit their net interest margins.

Economic Cycle

"For us, non-performing loans are not expected to be a big issue until 2013, the peak of the current economic cycle," said Zeng, head of Greenwoods Asset Management Ltd.'s Hong Kong office, in a phone interview. He declined to say what he is buying. Greenwoods has more than $500 million under management.

China has firepower to deal with a crisis. The nation has the world's largest foreign exchange reserves, at $2.4 trillion, and government debt of only about 20 percent of GDP last year, according to the International Monetary Fund. That compares with 85 percent in India and the U.S. and 219 percent in Japan.

CB Richard Ellis doesn't count empty office buildings bought by banks and insurance companies when calculating vacancy rates, since some of the space is for the owners' use. The Los Angeles-based company said in a report that vacancy rates are starting to fall and rents to rise for the best office buildings as China's fast economic growth buoys demand.

Gross domestic product expanded 10.7 percent in the fourth quarter from a year before, a two-year-high, after the government introduced a $586-billion stimulus package.

Full Buildings

"In many cases when you look at these buildings and say, that's never going to be fully occupied, somehow 12 to 18 months later the building is full," said Chris Brooke, CB Richard Ellis's Beijing-based president and chief executive officer for Asia.

Overcapacity may be looming in manufacturing as well. China's investments in new factories and properties surged 67 percent last year to 15.2 trillion yuan, more than Russia's gross domestic product. Excess steel capacity may have reached about 132 million tons in 2009, more than the 87.5 million tons from Japan, the world's second-biggest producer. The Beijing- based EU Chamber of Commerce report said a "looming deluge" of extra cement capacity is being built.

While neither Xie nor Chu see nonperforming loan ratios reaching the level of a decade ago, when they made up 40 percent of total lending, they say banks will see deterioration in their balance sheets.

Losing Money?

"A lot of people will lose a lot of money, but the banks will probably not go down like in the 1990s," Xie said in a phone interview. "Of course there will be a lot of bad debts. There will be a lot of mortgages gone bad I think."

Rodman displays the slide show to private equity and hedge fund clients brought in by banks such as Goldman Sachs Group Inc. at his office in eastern Beijing.

"China is the only place in the world that despite having more empty buildings than the rest of the world has yet to reflect those valuations on their balance sheet," Rodman said.

Gazing south from the building that houses the Beijing headquarters of Goldman Sachs, UBS AG and JPMorgan Chase & Co., one of the first structures in the field of vision is a 17-story office tower at No. 9 Financial Street. Empty.

Farther along are the two 18-story towers of the Bank of Communications Co. complex. Dirt is gathering at the doors and the lobby is now a bicycle parking lot. A spokeswoman for the Shanghai-based lender didn't return phone calls and emails.

More Offices

The supply of office buildings will continue to grow. Jones Lang LaSalle Inc., a Chicago-based real-estate company, estimates that about 1.2 million square meters (12.9 million square feet) of office space in Beijing will come on line this year, adding to the total stock of 9.2 million square meters.

The city government is driving growth regardless of the market. Financial Street Holding Co., whose biggest shareholder is the local municipal district, plans to build 1 million square meters of additional office space starting this year, and is talking to potential clients such as JPMorgan, said Lydia Wang, the company's head of investor relations.

Across town, the district government is seeking to double the size of the city's Central Business District, which already has the highest vacancy rate ever recorded in Beijing. It was 35 percent at the end of 2009, according to Jones Lang LaSalle.

All Rented

For its part, Beijing-based Financial Street Holdings has "100 percent" of its properties, which include the Ritz Carlton hotel and a shopping mall, rented out, Wang said. The empty buildings along Finance Street don't belong to the company, which is 26.6 percent owned by the district government.

Zhong Rongming, deputy general manager of the Beijing- based China World Trade Center Co., which built China World Tower 3, said the company is "optimistic about 2010 prospects" given China's accelerating economic growth. He said the new tower will include tenants such as Mitsui & Co. and the Asian Development Bank.

One new addition to Finance Street may give real estate boosters cause for concern. No. 8 Finance Street will be the headquarters for China Huarong Asset Management Corp.

The company's mission: selling bad debt from banks.

--Michael Forsythe, Kevin Hamlin. With assistance from Shelley Smith and Darren Boey in Hong Kong, Chris Bourke in London and Margaret Brennan in New York. Editors: Anne Swardson, Chris Anstey

trebor
11-03-2010, 13:30
A while back you were predicting that growth in Chinese exports were finished. Looks like that was an overly pessimistic statement.
I suppose it's always easier to say the figures wrong than admit you were wrong. ;)

For sure there's going to be a slowdown in the domestic economy in China. There has to be and the central bank will instigate it by raising rates amongst other measures. I expect that to happen 'fairly soon' Inflation is currently running at a 16 month high and predicted to go higher if the bank doesn't act swiftly.

Having said that, if they can negotiate this tricky period and cool the economy before it over heats then a worst case scenario should be avoided.
There are lots of commentators who believe it can be done. I agree with them.
Anyway, even if a downturn in the property sector occurs that doesn't constitute 'China going down in flames'

legspreader
11-03-2010, 14:20
A while back you were predicting that growth in Chinese exports were finished. Looks like that was an overly pessimistic statement.
I suppose it's always easier to say the figures wrong than admit you were wrong. ;)

For sure there's going to be a slowdown in the domestic economy in China. There has to be and the central bank will instigate it by raising rates amongst other measures. I expect that to happen 'fairly soon' Inflation is currently running at a 16 month high and predicted to go higher if the bank doesn't act swiftly.

Having said that, if they can negotiate this tricky period and cool the economy before it over heats then a worst case scenario should be avoided.
There are lots of commentators who believe it can be done. I agree with them.
Anyway, even if a downturn in the property sector occurs that doesn't constitute 'China going down in flames'

How am i wrong? One i dont trust their statics and two growth against what baseline number is the growth. I would say probally off of the bottom of their export curve. I would continue to say exports are still substantially below pre-crisis levels. Also there will be more WTO battles over Chinesse dumping as many of stimulus projects have been in creating additional production in markets that they were already over capacity.

Really. Just like the US sub prime didnt bring down the global economy right....

Nobbynumbnuts
12-03-2010, 04:34
How am i wrong? One i dont trust their statics and two growth against what baseline number is the growth. I would say probally off of the bottom of their export curve. I would continue to say exports are still substantially below pre-crisis levels. Also there will be more WTO battles over Chinesse dumping as many of stimulus projects have been in creating additional production in markets that they were already over capacity.

Really. Just like the US sub prime didnt bring down the global economy right....

The sting will be taken out of any WTO 'battles' by an appreciating yuan. That is likely to happen very soon.
That wont be great for Chinese exports in the short term, granted but will force companies to be more efficient. A phenomenon that all developing countries must go through.

Time will tell. The global economy is in far better shape today than you predicted and the prospects of a continued recovery are still in place.

Read 'em and weep. Armagedon didn't happen and looks less likely that it will.

legspreader
12-03-2010, 15:02
The sting will be taken out of any WTO 'battles' by an appreciating yuan. That is likely to happen very soon.
That wont be great for Chinese exports in the short term, granted but will force companies to be more efficient. A phenomenon that all developing countries must go through.

Time will tell. The global economy is in far better shape today than you predicted and the prospects of a continued recovery are still in place.

Read 'em and weep. Armagedon didn't happen and looks less likely that it will.

So all these issues are tied to the yuan huh? Not by long shot is there a link to some of them yes. How does the appreciating yuan going to deal with over capacity issues? It will make it worse. Also if companies become more effeciant that mean less labor not more another problem for china. They need more jobs not less.

The global economy is not in any kind of shape. But people are doing their damndest to talk it higher. Yep those PIGS countries are really setting the world on fire. Tied to this the euro woes. ect ect ect

You're a bloody cook if i want to know how to make a soup i'll give you a ring. Not to say that there arnt cooks out there that do understand business. Just that based on your posts and comments your business background and understanding is non existant. Good for you you can parrot what you read in the press. but you dont understand the fundamentals of business so you cant tell fact from fiction. So you beating your chest in triump is a bit laughable...

Still hold the position the commerical real estate market was unphased by the crisis here in Russia? It seems that over the last several months one or more announcements every couple of weeks about developers losing properties or going bankrupt. Then there are all of those that just went back to their lenders behind the scenes. The only think that is keeping the wheels on the wagon here in Russia are high commodities prices that arent likely going to last as their are no fundamentals behind them. Even you can precieve there are serious issues with the banking system in russia where the central bank has cut the rate over a half a dozen times and with each rate cut lending decrease not increases.

As for armagedon never claimed that but I do think a double dip is very much still a very real possiblity and Russia would be really really hurting if oil were even back at $60 per barrell.

Nobbynumbnuts
12-03-2010, 18:07
So all these issues are tied to the yuan huh? Not by long shot is there a link to some of them yes. How does the appreciating yuan going to deal with over capacity issues? It will make it worse. Also if companies become more effeciant that mean less labor not more another problem for china. They need more jobs not less.

The global economy is not in any kind of shape. But people are doing their damndest to talk it higher. Yep those PIGS countries are really setting the world on fire. Tied to this the euro woes. ect ect ect

You're a bloody cook if i want to know how to make a soup i'll give you a ring. Not to say that there arnt cooks out there that do understand business. Just that based on your posts and comments your business background and understanding is non existant. Good for you you can parrot what you read in the press. but you dont understand the fundamentals of business so you cant tell fact from fiction. So you beating your chest in triump is a bit laughable...

Still hold the position the commerical real estate market was unphased by the crisis here in Russia? It seems that over the last several months one or more announcements every couple of weeks about developers losing properties or going bankrupt. Then there are all of those that just went back to their lenders behind the scenes. The only think that is keeping the wheels on the wagon here in Russia are high commodities prices that arent likely going to last as their are no fundamentals behind them. Even you can precieve there are serious issues with the banking system in russia where the central bank has cut the rate over a half a dozen times and with each rate cut lending decrease not increases.

As for armagedon never claimed that but I do think a double dip is very much still a very real possiblity and Russia would be really really hurting if oil were even back at $60 per barrell.

At no point did i ever say the yuan was behind all the problems. But it will be revalued and that will appease many in the US and the WTO.
Of course, one way companies become more efficient is to reduce labour costs and/or increase productivity. It's much easier for China to weather this restructuring in a period of economic expansion.

The world economy is in better shape now than it was this time last year. Even though many people were doing their best to write it off and talk it lower. You included. I wasn't.

The fact that a CHEF actualy get his predictions correct on a more regular basis than you really gets up your nose doesn't it? :D
Your information comes from the same sources as mine. Bloomberg etc. just like me.
You're an expert? How come nothing you have forecast has come to pass then?
You didn't use the word armegedon but you implied the same on many, many occasions going back to the begining of this financial crisis. China going down in flames is not armegedon? The other statements and predictions you made about Russia as well. Are you trying to distance your selffrom them now?

So commodity prices are still going to tank? I think the outlook for them is still pretty good.
Problems in the banking system in Russia? Of course there are and i have said as much many times. That's a bit different from your wild claim that the system would fail. Is hasn't and it's highly unlikely it will now.

You crack me up. A double dip is very much a possibility? When did we actualy come OUT of recession then? What makes you think we are out of one?
Would that be when i told you it had probably bottomed out last May and that things were going to get better and you laughed!! :-)

You're too pessamistic. I said that a long time ago and i was right about that too.

legspreader
12-03-2010, 18:42
At no point did i ever say the yuan was behind all the problems. But it will be revalued and that will appease many in the US and the WTO.
Of course, one way companies become more efficient is to reduce labour costs and/or increase productivity. It's much easier for China to weather this restructuring in a period of economic expansion.

The world economy is in better shape now than it was this time last year. Even though many people were doing their best to write it off and talk it lower. You included. I wasn't.

The fact that a CHEF actualy get his predictions correct on a more regular basis than you really gets up your nose doesn't it? :D
Your information comes from the same sources as mine. Bloomberg etc. just like me.
You're an expert? How come nothing you have forecast has come to pass then?
You didn't use the word armegedon but you implied the same on many, many occasions going back to the begining of this financial crisis. China going down in flames is not armegedon? The other statements and predictions you made about Russia as well. Are you trying to distance your selffrom them now?

You're too pessamistic. I said that a long time ago and i was right.

At no point did i ever say the yuan was behind all the problems. But it will be revalued and that will appease many in the US and the WTO.
Of course, one way companies become more efficient is to reduce labour costs and/or increase productivity. It's much easier for China to weather this restructuring in a period of economic expansion.

Fine the yaun revalues a few percentage points. This will not offset dumping by Chinese producers in other markets. Remember one of my points they’re building extra production capacity in industries they’re already over capacity. one industry that comes to mind is steel but there will be others. This was a strategy that barely got them through the asian financial crisis. So WTO complaints will not likely decrease but increase. In terms of the labor question not sure with where you’re going with that as I agree with what you’re saying but I don’t agree with it applying to china right now 95% of Chinese GDP growth is infrastructure related. Which means once the projects are complete and the spending stops those jobs disappear.

Really is it? If you look at high level statistics maybe. But dig deeper that was before most stimulus packages taking hold now countries are unwinding them as the spending is not sustainable and there is a very big chance that the growth will disappear with it.

I would agree with your statement about you being right more than me. Economics don’t start and stop on a dime and just about everything I’ve ever said has pretty solid rationale that I can support. I said it once and I’ll say it again good for you you can parrot what you read in the press. But you don’t understand any of it to any kind of meaningful depth.

So you’re saying there was no collapse in the Russian commercial market? I had made comment along the lines of being a pessimist to a colleague some time back. His response was actually its all just that shite isn’t it?

If you want to believe it or not I’m a fairly optimistic happy person that finds the good in very bad situations. Oh and you’d probably be surprised if you were to know how many people actually agree with my positions.

trebor
14-03-2010, 09:39
At no point did i ever say the yuan was behind all the problems. But it will be revalued and that will appease many in the US and the WTO.
Of course, one way companies become more efficient is to reduce labour costs and/or increase productivity. It's much easier for China to weather this restructuring in a period of economic expansion.

Fine the yaun revalues a few percentage points. This will not offset dumping by Chinese producers in other markets. Remember one of my points they’re building extra production capacity in industries they’re already over capacity. one industry that comes to mind is steel but there will be others. This was a strategy that barely got them through the asian financial crisis. So WTO complaints will not likely decrease but increase. In terms of the labor question not sure with where you’re going with that as I agree with what you’re saying but I don’t agree with it applying to china right now 95% of Chinese GDP growth is infrastructure related. Which means once the projects are complete and the spending stops those jobs disappear.

Really is it? If you look at high level statistics maybe. But dig deeper that was before most stimulus packages taking hold now countries are unwinding them as the spending is not sustainable and there is a very big chance that the growth will disappear with it.

I would agree with your statement about you being right more than me. Economics don’t start and stop on a dime and just about everything I’ve ever said has pretty solid rationale that I can support. I said it once and I’ll say it again good for you you can parrot what you read in the press. But you don’t understand any of it to any kind of meaningful depth.

So you’re saying there was no collapse in the Russian commercial market? I had made comment along the lines of being a pessimist to a colleague some time back. His response was actually its all just that shite isn’t it?

If you want to believe it or not I’m a fairly optimistic happy person that finds the good in very bad situations. Oh and you’d probably be surprised if you were to know how many people actually agree with my positions.

As far as the stimulus affects the job situation the whole point I think is that the former increases the latter, which in turn then increases economic activity which in turn then demands more employees. Therefore a situation is created where the stimulus can be withdrawn and the economy is then self supporting.
It’s not without it’s critics and it’s not a silver bullet but so far it has done the job. Especially in the US.
For me the single biggest test now is job creation in the US. As you know this is a lagging indicator. The US has officially emerged from recession but the job figures are not supporting this. But actually this is quite normal. It will take a while for companies to re-hire. At the moment companies are happy to take back employees to ‘full time’ who were put on ‘part time’ and don’t appear on the jobless figures. Employees are also happy to ‘clock up’ as much overtime as possible to pay off those debts. All this means increased employment activity without improving the jobless figures. This won’t last. Companies will have to start hiring again soon to take up the demand in output.
When this happens the road to a full recovery has begun. When a full recovery is in motion in the US this in turn, will stimulate world demand. Including China.
I was watching a report on Bloomberg the other day that supports the theory that job creation has already taken hold in China. Wages are increasing. I don’t think it’s right to say that once the stimulus is withdrawn the economy stagnates and again and the jobs disappear.
Most countries US included are withdrawing the stimulus because they ARE working. Most of the world has come out of recession and the stimulus packages can be reduced, in the case of the US they have actually spent LESS than originally thought. Of course they cannot go on spending ad infinitum but the benefits are clearly there. It is working but until the jobless figures improve in the US it is not completed.
Also a problem lies in how long to apply the stimulus without creating inflation and excessive demand. That’s tricky because stimulus that was applied months back often doesn’t show any effects for months in the future. Bit like driving a car, turning the wheel and the car doesn’t move left for half a mile. As you rightly said economics doesn’t start and stop on a dime.
I have said before that I think your posts a factual and the theories are there but I just think you are overly pessimistic when coming to conclusions. To highlight my point you wrote:
“……..Which means once the projects are complete and the spending stops those jobs disappear.”
Why do all the jobs suddenly disappear? The spending packages were not implemented all in one go. They will not be withdrawn all in one go. Most governments agree to wind down the stimulus packages slowly allowing time for readjustment. You are also assuming that there is no more funding for further projects once these have been completed. If the need arises. To say jobs will disappear with them is wrong in my view.
I don’t think they will carry on much longer anyhow. As soon as jobs start to be created they will wind them down.
I am almost 100% sure that in 6 months to 1 year that is a statement, like others that will come back to haunt you.
Also, I’m willing to bet the farm that 18 months or so ago you were saying that the stimulus wasn’t going to work anyway. I can’t be arsed to look back and check all previous posts but considering the tone of your posts I’m sure I’m right.
Now that they have proved to be working (end of recession etc.) you are saying that once stopped they will have a very negative effect. Strange.

The Russian real estate market was hit very hard, no doubt about it, but it didn’t crash and burn. It’s not going to now either I think.

I’m sure you don’t take what’s written here to heart. I certainly don’t.
Most of it is just banter and letting off steam. You definitely do have a pessimistic view regarding these topics but whether that reflects you as person I have no idea. You are an intelligent guy, without doubt andf you have a deeper understanding of economics than me. I cook soup for a living, remember? ;) I am just someone who is very interested in the subject and follows events closely I think you underestimate how much i do understand though.
One thing that does puzzle me however is how you always seem to come to the negative conclusions you do when you have a good understanding of the mechanics of economics. The above point about jobs and the withdrawal of the stimilus packages is an example.

Bels
14-03-2010, 21:38
To the simple buyer like me? I am waiting for sesible property prices in Moscow area. At the moment it isn't happening. Prices must drop signicantly, and I don't know how long it will take, but it will happan.

I think that is the problem. we are waiting for the so called profiteers and launderers to disappear, and that is when the market price will drop. I am waiting for this time, and I feel I am not alone with this knowledge.

Bels
14-03-2010, 21:43
In fact I know for sure the market price will drop in the near future. therefore not a good investment in propert in Moscow area. Hence I wait untill the true price arrives. Bad incvestment for the time being , taking into cosiderion that Russia hasn't yet felt the true world recession here yet.

Yet the ordinary Russians will tell you they feel the inflation and are getting very angry. The recession they feel is loss of good income work, But that hasn't come home to the fact of their government, The Oligarchs can't help thelp them, as they are a tiny minorority, but they are responsible for causing the illusion that everything is ok.

Vadim
15-03-2010, 04:18
Prices must drop signicantly... I am waiting for this time.
Bels, that has never happened before and unlikely will happen in the foreseen future, in our lifetime I mean. Do you think this market is approaching its collapse? There are reserve niches in builders disposal. Mind that the Russians are cash buyers, and national mortgage market is very limited at the moment. They can always significantly increase sales by simply offering financing on a more reliable - then today's - conditions. That's already a sufficient potential for long term price growth. And there is a set of other effective mechanisms available for them to keep prices enormously high in Moscow and suburbs :-) for decades.

legspreader
15-03-2010, 12:18
As far as the stimulus affects the job situation the whole point I think is that the former increases the latter, which in turn then increases economic activity which in turn then demands more employees. Therefore a situation is created where the stimulus can be withdrawn and the economy is then self supporting.
It’s not without it’s critics and it’s not a silver bullet but so far it has done the job. Especially in the US.
For me the single biggest test now is job creation in the US. As you know this is a lagging indicator. The US has officially emerged from recession but the job figures are not supporting this. But actually this is quite normal. It will take a while for companies to re-hire. At the moment companies are happy to take back employees to ‘full time’ who were put on ‘part time’ and don’t appear on the jobless figures. Employees are also happy to ‘clock up’ as much overtime as possible to pay off those debts. All this means increased employment activity without improving the jobless figures. This won’t last. Companies will have to start hiring again soon to take up the demand in output.
When this happens the road to a full recovery has begun. When a full recovery is in motion in the US this in turn, will stimulate world demand. Including China.
I was watching a report on Bloomberg the other day that supports the theory that job creation has already taken hold in China. Wages are increasing. I don’t think it’s right to say that once the stimulus is withdrawn the economy stagnates and again and the jobs disappear.
Most countries US included are withdrawing the stimulus because they ARE working. Most of the world has come out of recession and the stimulus packages can be reduced, in the case of the US they have actually spent LESS than originally thought. Of course they cannot go on spending ad infinitum but the benefits are clearly there. It is working but until the jobless figures improve in the US it is not completed.
Also a problem lies in how long to apply the stimulus without creating inflation and excessive demand. That’s tricky because stimulus that was applied months back often doesn’t show any effects for months in the future. Bit like driving a car, turning the wheel and the car doesn’t move left for half a mile. As you rightly said economics doesn’t start and stop on a dime.
I have said before that I think your posts a factual and the theories are there but I just think you are overly pessimistic when coming to conclusions. To highlight my point you wrote:
“……..Which means once the projects are complete and the spending stops those jobs disappear.”
Why do all the jobs suddenly disappear? The spending packages were not implemented all in one go. They will not be withdrawn all in one go. Most governments agree to wind down the stimulus packages slowly allowing time for readjustment. You are also assuming that there is no more funding for further projects once these have been completed. If the need arises. To say jobs will disappear with them is wrong in my view.
I don’t think they will carry on much longer anyhow. As soon as jobs start to be created they will wind them down.
I am almost 100% sure that in 6 months to 1 year that is a statement, like others that will come back to haunt you.
Also, I’m willing to bet the farm that 18 months or so ago you were saying that the stimulus wasn’t going to work anyway. I can’t be arsed to look back and check all previous posts but considering the tone of your posts I’m sure I’m right.
Now that they have proved to be working (end of recession etc.) you are saying that once stopped they will have a very negative effect. Strange.

The Russian real estate market was hit very hard, no doubt about it, but it didn’t crash and burn. It’s not going to now either I think.

I’m sure you don’t take what’s written here to heart. I certainly don’t.
Most of it is just banter and letting off steam. You definitely do have a pessimistic view regarding these topics but whether that reflects you as person I have no idea. You are an intelligent guy, without doubt andf you have a deeper understanding of economics than me. I cook soup for a living, remember? ;) I am just someone who is very interested in the subject and follows events closely I think you underestimate how much i do understand though.
One thing that does puzzle me however is how you always seem to come to the negative conclusions you do when you have a good understanding of the mechanics of economics. The above point about jobs and the withdrawal of the stimilus packages is an example.

Nice cut and paste job on the US as for the China situation you still have addressed over capacity and sustainability of job creation in china both are major issues. China is capital construction is massive engine of their gdp growth and yes it will largely disappear once the stimulus is gone. Unless theirs a new project to employees all those constructruction workers. The government is already distancing itself from many of these projects saying that it has canceled local government garrantees that are behind these projects.

Your statement about stimulus is a bit ignorant as I have said from day one that stimulus is a shot of adrenaline. We have yet to get to a point where anyone can claim victory. If things are going so well why have many economies including the US and Japan recently added huge additional injections of stimulus. I would say most countries are winding down stimulus because they have to not because they think they need to. I still stand behind what I said a year ago there is still a very real chance of double dip recession. The only way for china to truly pull out of this is for global consumption to go back to pre-crises levels. To have this you need to have cheap and easy credit. Neither is going to happen any time soon hence my pessimistic view of their situation.

As for the Russian real estate. the fact that the vast majority of development and a good chunk of stabilized projects that were collateralized are now owned by their lenders (in most cases the market never hears about it and if they do theres a big lag in timing) isn’t crash and burn? Now the banks are in a similar situation to the original owners. The original owners couldn’t sell at a market price and pull any equity out of the project and banks cant sell because then they’d have to realize the massive losses they’ve taken on the project that is likely on their books as a profit currently.

I do apologize if I get a bit snippy from time to time. I agree stimulus creates jobs but especially in china it’s a question of quality and sustainability of jobs. One of the reasons that I generally more negative than the market is that the market, banks and governments are doing to their damndest to talk the market higher. Sadly so much of what happens comes down to perception and not reality.

drwho
15-03-2010, 12:34
Are you talking about buying or renting??? This subject makes my blood boil. I feel we are all being cheated in high rent prices for basically dumps. They have us by the ucfking **lls. Arghhhhhhhhhhh!!!

:10168:

Bels
15-03-2010, 21:27
I think you yu for the majority on that one here. Even those who own one property of which they need for themselves. YES! Prices are not real here! But eventually when the laundering, the cheating disappears. The prices will slump. It is alraeddy happening!! Individuals are chosing not to buy for the moment. They are wating for the big drop. There is no investmest in purchasing for the time being. Once the stubbbrn sellers start realising this, then the prices of property will down to its real value. Wait and see. But Russians are very stubbborn. they will wit untill they are bankrupt and starving. But it will happen!


Are you talking about buying or renting??? This subject makes my blood boil. I feel we are all being cheated in high rent prices for basically dumps. They have us by the ucfking **lls. Arghhhhhhhhhhh!!!

:10168:

Bels
15-03-2010, 21:34
I believe strongly in this. To heal a country of serious high inflation of which Russia has, more than any country in the world. They must realise that they really do have a recession, with no buyers. They must realise this first. Inflation goes down. And when init goes down low enough, then the country might recover at a later time. But if this country continues to have serious inflation, then the country is in for a disaster of which can't be imagined. Imagine the majority of the Russian who can't pay for anything from income that is completely kopeks. Yes it can happen if allowed to.

Willy
15-03-2010, 22:12
Are you talking about buying or renting??? This subject makes my blood boil. I feel we are all being cheated in high rent prices for basically dumps. They have us by the ucfking **lls. Arghhhhhhhhhhh!!!

:10168:


The banks here were buying up all the flats as investments, that's what kept the prices going up. They're trying not to sell so the prices will not go down.

Bels
15-03-2010, 22:23
The banks here were buying up all the flats as investments, that's what kept the prices going up. They're trying not to sell so the prices will not go down.

Why do you think that is happenining. And who on earth are the buyers. In my eyes we still have incomplete built blocks of flats over several years, and no apparent buyers. Blocks are half built for several years all over several years. Why is that. Are we in the same wavelength, or do you see something different. Where are you seeing fast developememnt. As I don't see it. We have modern ghost towns all over the place!!

legspreader
16-03-2010, 10:04
Why do you think that is happenining. And who on earth are the buyers. In my eyes we still have incomplete built blocks of flats over several years, and no apparent buyers. Blocks are half built for several years all over several years. Why is that. Are we in the same wavelength, or do you see something different. Where are you seeing fast developememnt. As I don't see it. We have modern ghost towns all over the place!!

There are some very naive people that will believe what ever they're told. For instance in the warehouse market their are two sets of market prices. Those that know how bad things are and wont pay more than $90-$95 per sqm and those that believe what they read in the paper and are happy to negotiate prices at $110-$115 per sqm or higher.

Oh you also have the nesting snydrome for marride couples. Even if the man knows that things are way out of whach hes likely to get henpecked into buying by the mrs.

Nobbynumbnuts
16-03-2010, 11:12
There are some very naive people that will believe what ever they're told. For instance in the warehouse market their are two sets of market prices. Those that know how bad things are and wont pay more than $90-$95 per sqm and those that believe what they read in the paper and are happy to negotiate prices at $110-$115 per sqm or higher.

Oh you also have the nesting snydrome for marride couples. Even if the man knows that things are way out of whach hes likely to get henpecked into buying by the mrs.

Legs, you misssed the last rise in property prices and you will miss the next one too.

legspreader
16-03-2010, 12:39
Legs, you misssed the last rise in property prices and you will miss the next one too.

certain investments are a sprint equities for example. Real estate on the otherhand is a marathon.

I'm sure many people were expressing the same sentiments to nay sayers in other markets in the US Dubai and elsewhere. These same bulls bye and large have lost everything. famously the irish investor, that commited suicide, that bought ireland in dubai world island scheme.

Rule number one never invest in something you dont understand no matter how good it sounds.

Funny enough had a similiar conversation to our discussion on the board regarding the global economy china russia the us with the head of strategy with the head of strategy for a major bank here locally. you know what he agreed with what I was saying.

You know the old saying even the broken clock is right twice a day? well just because you got lucky with a property invesment once doesnt mean it has anything to do with you and your view of the market other than pure happenstance and luck.

credit makes the world go round and it just isnt available in volumes that are required for a recovery in most parts of the world and in terms of china its the exact opposite problem....

legspreader
16-03-2010, 12:52
The banks here were buying up all the flats as investments, that's what kept the prices going up. They're trying not to sell so the prices will not go down.

i wouldnt say they're buying them so much as they are taking possession as they were collaterlized by bowers. Though I could see them selectivly trading properties between related parties for inflated prices to create a sense of recovery in the market and to inflate the value of the assets they're holding on their balance sheets.

trebor
16-03-2010, 13:52
certain investments are a sprint equities for example. Real estate on the otherhand is a marathon.

I'm sure many people were expressing the same sentiments to nay sayers in other markets in the US Dubai and elsewhere. These same bulls bye and large have lost everything. famously the irish investor, that commited suicide, that bought ireland in dubai world island scheme.

Rule number one never invest in something you dont understand no matter how good it sounds.

Funny enough had a similiar conversation to our discussion on the board regarding the global economy china russia the us with the head of strategy with the head of strategy for a major bank here locally. you know what he agreed with what I was saying.

You know the old saying even the broken clock is right twice a day? well just because you got lucky with a property invesment once doesnt mean it has anything to do with you and your view of the market other than pure happenstance and luck.

credit makes the world go round and it just isnt available in volumes that are required for a recovery in most parts of the world and in terms of china its the exact opposite problem....

These are well worn cliches.
If that were true no one would ever buy or invest in anything would they?
As i said earlier in this thread, property is definately for the long haul, especially the property market in Moscow.
People who bought property in Moscow back in 2002/3 when you were saying it's a mugs game have done fantasticaly well, even taking into consideration the recent pull back in prices.
Add the rent saved or rental income to the capital appreciation for those who bought and the returns have been even better.

As for Russia and China, i have also been listening to fund managers with the big investmernt houses and they haven't changed their weightings regarding the BRIC countries. Many are recomending Russia in fact.
Of course, the guy you spoke to in Moscow is pukka and those i'm listening to are deadbeats, right? ;)

As for property investment if you follow YOUR rule and buy for the long term, if you buy when prices are low you should be okay. There are guarantees in this life for anything (sorry for the cliche ;))

I think you aqre overstating the problem in China. We shall see............

legspreader
16-03-2010, 17:04
These are well worn cliches.
If that were true no one would ever buy or invest in anything would they?
As i said earlier in this thread, property is definately for the long haul, especially the property market in Moscow.
People who bought property in Moscow back in 2002/3 when you were saying it's a mugs game have done fantasticaly well, even taking into consideration the recent pull back in prices.
Add the rent saved or rental income to the capital appreciation for those who bought and the returns have been even better.

As for Russia and China, i have also been listening to fund managers with the big investmernt houses and they haven't changed their weightings regarding the BRIC countries. Many are recomending Russia in fact.
Of course, the guy you spoke to in Moscow is pukka and those i'm listening to are deadbeats, right? ;)

As for property investment if you follow YOUR rule and buy for the long term, if you buy when prices are low you should be okay. There are guarantees in this life for anything (sorry for the cliche ;))

I think you aqre overstating the problem in China. We shall see............

Maybe so but they don’t change the validity. No if that were true no one would make stupid investments. What was a major reoccurring theme in the financial crises invidividuals and government bodies investing in complex structured investments that they didn’t understand but sounded fantastic but created huge losses.

Really people that bought then might be doing ok on paper according to “market pricing” but whos buying right now? You can believe the press about activity picking up but I don’t. I still stand behind the fact that real estate prices are nonsensical and that if you really want to sell in the current market good luck trying to actually get a “market price”. are there properties that have traded at these levels? Probably but as pt barnan once said theres a sucker born every minute and should not indicate a sustainable price point. I spoke with one person last summer that had a flat near pushkinskaya valued by one of the big resi firm. It came in at something like $2.4 million. Crisis hits and some time passes revalued $1.6 million by the same firm more time passes revalued to $1.2 million hes obviously a bit mifted and asks if I were to put on the market at $600,000 could I sell it quickly. They wouldn’t even answer…
Yep and most of those house are making big money on those recommendations. Does it mean that they actually believe them. Just like the strategist I spoke with last night if he was in an official capacity he might refute much of what I was saying as it went against the companys line which of course is the companies bottom line. I would bet you dimes to dollars if you got the people youre listening to to give uncensored opinions youd get a very very different message. Remember many of these same fund managers were advising people to buy dirivatives backed by US subprime housing as a high return safe investment when in fact they all knew it was a ticking time bomb. The bankers care about their quarterly earnings not your portfolios success. They love guys like you that buy what they announce hook line sinker so when need to they can create some positive momentum for the exit of the investors they care about i.e. big funds and high net worth individuals. It’s the classic pump and dump. They do it all the time. Just look at Goldmen in the Greece debt story. I don’t know if its been proved yet but they speculated that after creating this slight of hand disguising the true nature of their debts, then selling on to investors they then went on to bet against the performance of these bonds.
Yes but prices aren’t low at the moment. Lower yes low no. With regards to china I think I’m probably understating the problems their not overstating them sad to say…