Looking around the forums this week shows countries like Bulgaria, Romania and Spain are also experiencing a tightening of credit.
In Bulgaria some potential investors are in danger of losing their deposits as they cannot obtain the finance they need to proceed. Only six months ago you would not have thought offers of finance would disappear so quickly.
According to a thread on the totallyproperty.com site it has never been that easy to get a mortgage in Bulgaria but now it is even harder as there have been significant changes.
Last year most banks were apparently willing to lend up to 75% and credit checks were not too stringent. But they started to get worried about the sheer extent of developments in popular locations like Bansko and Sunny Beach and the implications for over supply.
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Then the global finance downturn struck as well. Posters Jain and Chris, who are directors of Quest Bulgaria magazine, give some good advice on this thread. It may be that the preliminary sales contract states that the sale is subject to a mortgage being raised and if so there might be a way out without losing your deposit.
No matter how bad it gets there is always somebody worse off and they are often in the US. On the biggerpockets.com forum there is a property investor with 17 mortgaged properties who needs to re-finance but can't get anywhere with a conventional lender. The properties are all in Arizona which is facing one of the highest foreclosure rates in the US. There isn't much helpful advice for the poor chap.
The election is just a few days away in the US and property owners and investors will undoubtedly be weighing up which side to vote for in terms of what they are going to do, or not do, for the economy.
So it is not surprising to find a new thread on the biggerpockets site titled McCain or Obama. Opinion seems to be that neither will be good for the real estate investor but perhaps McCain has the edge because 'at least pretends to be for tax cuts and low spending' but they will both be a disaster for business.
Capital gains tax is an issue for property investors and McCain has pledged to keep it low whereas Obama wants to raise it to a pretty crippling 30%.
My vote goes to the poster who says: 'personally I think they both suck.' One poster even calls for Clinton to be allowed back.
Then there are developers in India going bust and some of India's wealthiest investors losing lots of money. A thread on the indianrealestateforum.com shows what a difference a year can make.
Just 12 months ago money was flooding in from foreign investors and home loans were quite low. There was an IT boom and people were buying more than one property for investment purposes.
Now foreign investment is going out of the country, interest rates are too high, the IT boom isn't a boom anymore and people are desperate to sell properties they can no longer afford.
One piece of advice is to buy gold. But you can't rent out your gold or enjoy living in it.
