Bulgaria Realtor » Bulgaria

Hello Again, World!

Jimmy Craig — Thu, 04 Mar 2010 22:29:27 +0000

Hello Again, World!

Welcome to Good 2004 and Bulgaria Realtor. This is the first post on the new setup here at Bulgaria Realtor. What we are doing is combining the original website dating from 2005 and the blog from 2007 into one happy package. This should mean that there will be more content for your reading pleasure and – of course – your information as well, and all in one place.

Well, that’s about what it’s about, so maybe we should start blogging!

Наздравици! (cheers!)
from Craig at
Bulgaria Realtor

Hello Again, World!

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Brits and Bulgarian Real Estate

Jimmy Craig — Tue, 26 Jan 2010 16:39:55 +0000

Brits and Bulgarian Real Estate

Hello again,

We ran across an article in the online publication “Shelter Offshore” that tried to explain exactly what it was that brought the Brits and the Irish to Bulgaria in such huge numbers in the late 1990′s and early 2000′s. There’s a paragraph in the middle of the article that I think does a wonderful job of summing it all up:

The fact of the matter is, Bulgaria was possibly the biggest victim of over-hyped overselling of property at a time when we Brits and we Irish couldn’t get enough of the stuff abroad! We believed that we were rich because we were convinced that the value of our own homes were rising and that the cheap credit and loans that we could get our hands on easily would never be hard to pay back. At the same time we were told about an almost mythical land poised on the brink of EU entry where money was being thrown at the country to make it rise in value across the board. (http://www.shelteroffshore.com/index.php/property/more/what-happening-bulgaria-dead-property-market-10726)

I think that’s a pretty good summary. The only part that maybe is left out is the arrogance of the Brits and Irish who did buy in Bulgaria when the Pound Sterling was strong and the Euro was weak, and also the attitude that said – in effect – “we’re going to take over Bulgaria and turn it into GB2.”

Well, we all know what happened, and unfortunately for Bulgaria, the downfall of the Brits and Irish also killed the Bulgarian real estate market even more thoroughly than the US real estate market meltdown and the subsequent financial disaster(s).

There were innocents (yes, there really were innocents involved in this whole mess) who suffered the most and deserved it the least: the Bulgarians who got talked out of their traditional cash investment policies into mortgages that they subsequently could not pay. In a sort of an attempt to emulate what the Brits were doing, some Bulgarians slaughtered their own financial piggy bank. Luckily, I believe that it was relatively few. Some of these were happily driving super-expensive 4×4′s (that they could not afford) and living the life of Riley (that they also could not afford) until Armageddon arrived. Then, everything went down the drain: the house, the vacation apartment on the coast, the car, and all of that fancy hyped-up lifestyle.

Will the Brits return? I think – ultimately – yes. To a certain extent it’s a question of greed, and when the Bulgarian market starts showing signs of recovery, the greedy ones will be back. And some might even return because they like the place. There may even be some who buy up a few apartments from fellow Brits at what they think is the bottom of the market, and return to the Bulgarian market in that way.

We’ll see!

Jimmy Craig
for
Bulgaria Realtor Blog and
and Good 2004 OOD

Brits and Bulgarian Real Estate

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Bank Mortgage Credit Expanding

Jimmy Craig — Thu, 12 Nov 2009 18:20:59 +0000

Bank Mortgage Credit Expanding

Hello everybody,

There is a press release on Focus that indicates that at least a few of the banks making mortgages in Bulgaria are starting to loosen the reigns a little for prime borrowers and prime properties. Here’s the article:

Banks lend up to 80% of the real property price
10 November 2009 | 00:15 | FOCUS News Agency
Sofia. The banks in Bulgaria have been getting increasingly resilient in their lending policies. At least 4 financial institutions have been reported lending amounts covering up to 80% of the real estate price – something we haven’t seen since the summer of 2008. According a recent market survey of CreditCenter, only people with steady income, willing to buy liquid apartments have benefitted from the more resilient terms.
Presently, only monolith buildings in Sofia, Varna, Plovdiv and Burgas can get you a loan that covers 80% of the deal.
Panel flats are still in the wrong end of the scale, as banks lend between 60% and 65% of the price.
© 2009 All rights reserved. Reproducing this website’s contents requires obligatory reference to FOCUS Information Agency!

To me, that’s a reasonable move, both for the market and also for the banks! It appears that at least some of the less internationally-controlled banks are feeling the pinch of reduced interest income. The international banks are most likely still under severe constraint by their parent organisations that could still be in trouble from the “crisis.”

The next item in the same series of press releases by Focus talks about the increase in bad loans in Bulgaria to over 8,5 percent. They don’t say whether that’s based on the number of loans or the value if the loans, but I expect the former. That’s high, historically speaking, but under the circumstances, probably not that bad. For me, it represents a potential for the investor with cash to take over some prime properties at a severe discount, possibly even with a mortgage back from the seller (the bank) under certain circumstances.

In other news, there are opinions surfacing that the Bulgarian real estate market will bottom out in the spring-summer 2010 time frame. This would place the ideal timing for investing in the market (for people with resources and/or being classified as a prime borrower) in the coming six months. After that (when the 2010 summer season starts) the prices presumably will have already started the seasonal increase, and the best of the properties will already be taken or at least “reserved” in some way.

That’s all for now,

Craig
for
Good 2004

Bank Mortgage Credit Expanding

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