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| A key principle in our investment strategy is that, from a percentage standpoint, no market can appreciate as fast, as in the countries that are experiencing the strongest economic growth. The indigenous population will have increased buying power, and foreign capital will flow due to speculation of rapid escalating property values, thus increasing the demand for purchases. The combination of high economic growth, depressed real estate values and increased foreign Investment, has understandably resulted in rapid appreciation of the real estate values in countries entering into the European Union. The gains achieved in markets like Ireland over the last 10 years in a prime example and we have a strong belief that the factors that have driven up those markets will follow a similar trend with the more recent members of the European Union. Poland attracts more investment from Ireland, the UK and Germany than any other country in the EU. This investment optimism has been clearly justified. Annual GDP growth is 6.5 with a projected rate of over 7% for 2008. Over the last two years property prices have risen over 14% per annum with rates as high as 35% in major cities. Unemployment has dropped from 30% in 2003 to 9.8% in 2006. Real wages growth (the amount above inflation), continues to rise at a rate of 6% per annum. This job growth is one of the main factors contributing to Poland's rapid economic growth and with a highly skilled labour force , combined with low labour cost, this trend is certain to Continue. This all translates into a substantial increase of individual wealth and greater demand for property ownership. The Polish housing market is a booming market. The emerging middle class has allowed a larger number of people to enter the property market and a rapid increase of suburbs surrounding major cities. Borrowing in espect of house purchase is relatively new, only 14% of the population have mortgages. As this method to purchase property becomes more popular, both the ordability and demand for housing will grow, resulting in rapidly escalating property values. |
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Summary:
With a strong economic growth, increased purchasing power from the indigenous population and
escalating foreign investment, the property market in Poland will continue to grow, this will result in
strong real estate returns for any years to come. MH strives to find locations that will best capitalize on
these opportunities and thus maximize returns of invested capital. |
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