Bulgaria Realtor Blog

Bulgaria Realtor

Hi there!

“Now is the Hour - Part 2″? What in the world do I mean by that? Well, think about it - if the first part talked about properties, this part has to be an update on financing, right?

Right!

What’s starting to happen is that the banks are starting to suffer from the lack of new funds and new sales - why? Restrictive to prohibitive terms for new mortgages. Remember what I did write in Now is the Hour - part 1?

“Bulgarian mortgage lenders have put the stops on the business with limits as to how much they will lend (typically 40% of the buying price, maximum), and also with really restrictive interest rates - 12-15% plus the Interbank rate plus signing fees, depending on the type and life of the mortgage.”

Well, there appear to be a few Bulgarian banks out there that are not satisified with their returns at those levels. What’s happening? They have dropped their interest rates by 50% or more, and are willing to go to 50-55% of the market value of the property (in extreme cases even 70%).  This is still not like the glory days 2-3 years ago, but it will certainly help out the real estate market.

So, welcome to “Now is the Hour - Part 2″! 

It really IS the time to start choosing what you really want and start organising your purchase plans!  For the names of the banks presently involved, see the Focus Information Agency article at http://www.focus-fen.net/index.php?id=n185477.  

Ciao for now

Craig
for
Bulgaria Realtor

P.S. Remember, you read it FIRST on
Bulgaria Realtor!

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Hi there!

I don’t expect that you remember the US radio program called “Now is the Hour”, and it’s not important that you do. What is important is that you read this and take note - it can be very important for you!

As you probably know, I’m in Bulgaria with Elena now, and we have discovered the following. The real estate market for the Bulgarian central Black Sea resort area is bottoming out. What does that mean for you? Well, here’s the way we see it.

Now is the time to start looking very seriously for the property you want to buy in our area - Nessebar-Sunny Beach-Sveti Vlas. Why? Because there are other people already looking - yes, looking for bargains, but also looking to find that one property that is exactly what they want at the best price they are likely to get - ever!

If you wait much longer, the desirable properties will be sold, and there won’t be any more for some time. And at today’s prices, maybe never! When the best existing properties are off the market, there will still be the ones that are not so great, and these will tend to put price pressure (= limits or brakes) on new construction. These effects will keep prices from rising rapidly again, but will also result (as we have said before) in the poorer properties potentially being torn down, rather than sold “at any price.”

The difficult part for the moment is the mortgage situation, if you need assistance with your financing. Bulgarian mortgage lenders have put the stops on the business with limits as to how much they will lend (typically 40% of the buying price, maximum), and also with really restrictive interest rates - 12-15% plus the Interbank rate plus signing fees, depending on the type and life of the mortgage. These practices are at odds with many other European countries, and are doing a good job of killing the new construction business here.

Bottom line? If you have the cash, wherever it comes from, now is the time to get your pick of the best properties at the best prices in our area. If you wait, the cream of the crop will be gone.

Ciao for now,

Craig
for
Bulgaria Realtor

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Hi there,

As predicted, the costs for construction of real properties are dropping. There are two reasons for that, one is that the costs for materials are lower due to lack of demand and lower energy and transportation prices. The other is the lack of jobs for contractors and strong competition for the little amount of work available.

The second item - competition in the construction arena - will tend to even out over time. What we expect to happen is that the weaker (presumably marginal) contractors will be forced out of business on a financial basis. The buyers will (have) become more discerning, making sure that their contractor lives up to the contract and does the job properly the first time. The days of the “slap it together and get rid of it” are over, at least for the near to medium term.

Finally, the market prices will be limited by the partially-finished properties that were stopped due to the lack of money and buyers. It will be less expensive and faster to finish the better of these than to start from scratch. The less viable incomplete construction (with design and/or infrastructure problems) will probably be demolished over the medium term, which will reduce the pressure on the lower end of the price range.

Craig
for
Bulgaria Realtor

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