Post by mambo on Oct 8, 2008 15:15:00 GMT 1
Madgolfer,
Perhaps I should explain what I mean with 'greedy' Croatians.
When you are selling your own house it is normal you want to have the highest price as a seller, I would do the same.
However, when I have my own house, use this house as collateral for a loan to build some cheap apartments, which I want to sell with a 300 to 400 % profit, I may end up with no choice but to reduce the asking price of those apartments. If I don't reduce the price and I cannot pay the mortgage dues I run the risk the bank will take it all away.
Strangely enough we have seen some very good examples here in Istria. Near Baderna a lot of apartments were built with an asking price of 1100 - 1700 euro/m2. The apartments even had a common swimming pool and the quality is not that bad.
Most of these apartments have been sold and the owners are quite happy.
Now take a different project, downtown Porec. Some developer built 2 large apartment buildings, just behind the parking lot. They were asking 3600 euro per square meter and they are still asking 3600 euro per square meter. Needless to say they are not selling anything.
I have no clue how this company is doing financially, but I doubt that they can keep going on paying the bank loan without selling anything.
Same goes for the private home owners who are building 2 or 3 apartments and who are trying to sell them. They have a price in their head and they simply refuse to come down. Now the season is over the potential buyers are gone and these 'developers' will have to face the consequences................paying back the bank loan themselves and thus losing a lot of money each month.
They will not be the first who find out they can no longer pay the bank and thus being stubborn is going to bite them in the a*s*s. Not very clever if you ask me.
Trying a high price is Ok, but at a certain time the product simply has to move. It is then better to unload and take a little less profit than to be stubborn and demand only the jackpot.
Perhaps I should explain what I mean with 'greedy' Croatians.
When you are selling your own house it is normal you want to have the highest price as a seller, I would do the same.
However, when I have my own house, use this house as collateral for a loan to build some cheap apartments, which I want to sell with a 300 to 400 % profit, I may end up with no choice but to reduce the asking price of those apartments. If I don't reduce the price and I cannot pay the mortgage dues I run the risk the bank will take it all away.
Strangely enough we have seen some very good examples here in Istria. Near Baderna a lot of apartments were built with an asking price of 1100 - 1700 euro/m2. The apartments even had a common swimming pool and the quality is not that bad.
Most of these apartments have been sold and the owners are quite happy.
Now take a different project, downtown Porec. Some developer built 2 large apartment buildings, just behind the parking lot. They were asking 3600 euro per square meter and they are still asking 3600 euro per square meter. Needless to say they are not selling anything.
I have no clue how this company is doing financially, but I doubt that they can keep going on paying the bank loan without selling anything.
Same goes for the private home owners who are building 2 or 3 apartments and who are trying to sell them. They have a price in their head and they simply refuse to come down. Now the season is over the potential buyers are gone and these 'developers' will have to face the consequences................paying back the bank loan themselves and thus losing a lot of money each month.
They will not be the first who find out they can no longer pay the bank and thus being stubborn is going to bite them in the a*s*s. Not very clever if you ask me.
Trying a high price is Ok, but at a certain time the product simply has to move. It is then better to unload and take a little less profit than to be stubborn and demand only the jackpot.