Tuesday, March 31, 2009

Stung in the Property Market? It Could Happen to a Journalist

One of the great joys of the internet is that it helps you to trace things back through the passage of time. If politicians say one thing one day and another thing on a different day, then there is some eagle eyed blogger or forum poster that will spot it, or search for it, and bring it to light. If a journalist claims that a particular location is the bees knees and cats whiskers one year and changes their mind another year, then it can very easily be found online. It makes for a whole new level of transparency in the 'information stratosphere'. 

In this particular case there is no great need for the tracing back, the person in question isn't trying to hide anything, in fact the exact opposite is the case, but reading the original article is interesting, when the outcome is considered, nonetheless. 

With this in mind I read with interest a very honest recollection from a property hunter at the weekend, relayed in the Irish Mail on Sunday. Recollections of an overseas property hunter are, you may well say, two a penny and 'very 2007'. But this was no ordinary recollection, it was that of Zoe Dare Hall, a well known and respected British property journalist. Again, you may well say, 'isn't it well for her to have a platform to tell us how wonderfully she did in her overseas purchases when we have all been falling by the wayside' and again, you'd be incorrect. 

Ms. Dare Hall was not, in fact, waxing lyrical about her wonderful timing in entering the market at 'just the right time' and exiting it having made a 'small fortune'. On the contrary, she was berating herself for 'losing her mother's Legacy - in Estonia'. You will find a scanned copy of the the piece here, (many thanks to Action Against Churchills for this). For those who don't wish to read it, Ms. Dare Hall basically outlines the nightmare scenario for every amateur (or professional for that matter) overseas property investor. She avoided all the so called 'hot spots' in favour of the little known seaside town of Parnu in Estonia. If you check out this article in the Independent, from July 2006, you will get the gist of why she decided to invest in this particular location. Here's a snippet:

'Many people believe that Parnu will be the next Tallinn. "Tallinn's market is very tight but Parnu is the place to be," says Chris Tonkinson of Crichton Developments, which is selling apartments on a golf resort near a white-sand beach in Valgeranna, and in Audru, from £50,000.'

Essentially, the Estonian property market has tanked. Added to this, the Isle of Wight based agent, Churchill, through which Ms. Dare Hall invested - despite being led to believe she was investing through Crichton Developments - has gone under. Not only that, Karl Goldthorpe and Paul Wade of Churchill's have been arrested by Isle of Wight police following allegations about their dealings in the overseas property market. 

Essentially, despite her best attempts to avoid the 'sharks' in the overseas property market, Ms. Dare Hall found herself swimming among them.  

I have to say, well done to Ms. Dare Hall for putting her story out there because, there are many who wouldn't (and no doubt many who haven't). It is a lot easier to ignore it and pretend it never happened, an unfortunate habit of Irish investors who get roasted. It also begs the question; "if an overseas property journalist who has been around the world and interviewed dozens of agents and developers, can get caught out in such a fashion, well, where's the hope for the rest of us?" There is no protection of any description for overseas property investors and amateurs regularly get stung for very large amounts of money. Everybody just seems to be prepared to turn a blind eye to it these days. My inbox is overflowing with stories of wealth sapping losses - but nobody seems to be in the least bit interested. 

It's always the same, there's never a damned NPSRA around when you need it. We need regulation, but it appears we're not going to get it - but that's a story for another day.

It also begs the question - should property journalists be obliged to declare their investments so that those reading their columns can ascertain whether their guidance should be heeded or ignored.

OK, it's not an obligation yet, so I'm not telling you. Suffice to say, I'm a lot more solvent than most Irish developers or banks at the moment - but that's not saying a lot. 

If you have had problems with the Isle of Wight based Churchills group or Karl Goldthorpe, you may like to visit the Action Against Churchills group which, as it says, will keep you up to date with what is happening with respect to actions against the group. 


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