First topic message reminder :

Over the past year I have been fascinated by the price of things that are up for sale. People ask a price at the beginning which when the article is not sold, they drop, which is a sensible thing to do if you wish to sell something if the asking price is not paid in the beginning. Most people always ask what they would like at the beginning then are prepared to negotiate. Items that are used always have had a re sale value, take cars depreciation set at a % if in good condition etc, when we buy an expensive item such as a car most people surely look at whether that model etc holds its value.
Property, in Bulgaria at the moment the drop in asking prices for re sales in just unbelievable, some even being sold at half what the person paid in the beginning, I am not just talking apartments in the coastal resorts but it is now evident in village properties. I am only talking Bulgaria, which leads to me to my questions

1. Do you think that people are doing this because they are selling up and just want to get something for there property and are prepared to take a loss

2. Or that they bought items and property thinking that they would make big profits when selling these in Bulgaria, and property would be worth a lot more in a few years, so now are just trying to off load items even at a loss

3. Or are second hand items now worth nothing,

Just interested in what other people think

Hi,

Some people bought their properties in Bulgaria through bank loans. And now they just don't wish to pay this loans anymore. That's why they sell at least to cover the mortgage.

Bulgaria lawyer

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Something that maybe wasn't understood by all buyers is Bulgaria's evidently huge difference in prices between city and country properties? After all, if you sell for a quarter million in UK and buy for 50K in BG it must seem like you are getting a bargain - if you don't realise that 7K would be a more realistic price for what you got. When I first started looking at unrenovated village house prices in Bulgaria 3.5K would get you one, but if you don't know that and all the agents are asking 15 to 25K for the same thing, people start buying at these inflated prices and so the agents just put them up even more, to whatever they think buyers will pay. You end up with a completely false picture of the actual value of property in your area. My opinion - and it's only that and could be wrong - is that many people bought at vastly inflated prices because without speaking the language and having Bulgarian friends, there was no way they could know that they were being grossly overcharged.

Genuine property hotspots go hand in hand with regeneration and new work opportunities, this provides the foundation for real increase in value. Apparent hotspots that arise simply because a lot of people see the area as a desirable place to live, have no true basis for price increases hence when those people no longer want to live there the value reverts to what it was before.

The holiday resorts are a kind of halfway house because the anticipated potential for holiday rental seems to provide a basis for the rise in value, but if holiday trade doesn't then increase enough to keep up with the amount of new accommodation available, or decreases as holidaymakers move on to the next new fashionable destination, you are again left with a false value that doesn't match the reality of the local economy.

When I was in my twenties, you could get a mortgae of 2.5 times your annual income. That plus the 10% deposit you paid was the value of what you could buy, in whatever income bracket you existed. It was a good yardstick and worked effectively for a great many years. Repossessions were rare and negative equity unheard of. If you calculate the average annual income of a typical Bulgarian villager, multiply by 2.5 and add a deposit approximately 10% of the total, that's what your village house is really worth in basic habitable condition i.e. sound and dry but not necessarily smart or modern. Then you look at the city earnings and understand the difference in prices.

Commuter belts also rise in value in any country where the cities are providing new earning power but not all those working there want to live in one. Nevertheless the whole lot is still vulnerable to recession and it's consequent fall in achievable property returns. The faster prices have risen the faster they are going to fall again if the economy that supported the increase dries up again or had no real basis in anything concrete to begin with.

This is obviously not going to make good reading for anyone who is stuck with a house they need to sell, but people keep on asking why they can't get what they spent and I'm just trying to shed a bit of light. Sorry an' all!

Fruitlover - Everything you have written is largely true. However, there are loads of properties on websites that are amazingly cheap - in the price bracket of years ago and even less. They still are not selling.
Remember also, that some of these very cheap properties are not in any way 'sound and dry' as UK properties might be. The reality is that people would be buying for the land and view which is still viable if the property is in a pretty desirable area with a functioning village. Often when these properties are viewed, the reality of what is on offer, is not even worth the cheapest price. This is the reason that buying off Ebay is not always a good idea even though some people have been satisfied with their buy.
I am of the opinion that even the most ardent DIYer or even professionals, would agree with my assessment of most of the very cheap properties on offer which would not be considered renovatable and needed to be pulled down to start again.
Really the bottom line is that people just have not got the spare cash for a decent renovatable property and certainly could not afford a second mortgage with the fluctuations and poor exchange rate at this time.
Our village is pretty, has basic amenities and a short drive to Veliko Turnovo and no British person has bought in the last few years although we have 3 big developments bought by rich Bulgarians! All 3 have been built from scratch. That might tell you something!

I agree with what you say here oldun but I also believe that some have what I call a very strange mentality? what I mean by this is some folk believe they can buy a property for say £5000 or less and then spend peanuts on it to get it renovated and that's when the shock comes because we all know that even though Bulgaria is a comparatively cheap place to live its still going to cost you quite a bit to get a ruin up to spec and that's if it doesn't need pulling down all together.

I quite agree with you Oldun, many cheap properties really are only worth the price for the plot, and one with a good situation will always score better than those with no view or in a scruffy village. Location is everything in a buyer's market. As you say, near Velico Turnovo you fall within a "
commuter belt"
where Bulgarians with their own businesses or employment in the more lucrative professions are able to enjoy the best of both worlds. There may eventually be an endless supply of these wealthy buyers but it's early days yet, so they still have a very wide range of property to choose from. I imagine a fairly high percentage of people would build from scratch if they could, or knew enough about the process.

Not everyone who buys in Bulgaria is looking to relocate though, for some it's just a cheap holiday home where they can enjoy the countryside in a warm climate. A caravan or motor-home can provide accommodation if the house is really unfit to do anything with. For other people it's an investment, if it turns out to be fit to do up they can, if not they can just leave it as is and in the long term maybe get a better return than if that money sat in the bank. 7K wouldn't buy you a plot on the coast, it may buy you a ruin within half an hour of an airport, but away in the back of beyond it can get you a sound house with sufficient basic amenities that you can move in, even if it all needs re-plastering and updating. For someone fresh from city living this may prove to be just too much of a culture shock, they may find themselves unable or unwilling to make such a huge adjustment. Then again, if you've lived off the land in the back of beyond before, and renovated an old ruin or two before, it's not exactly a leap in the dark.

On the other side of the coin, people who in the UK would be looking at auction property or repossessions, will have heard that some ex-pats in Bulgaria are desperate to sell and return home. They are not there to pay you a fair price, their sole intention is to find a great bargain. The decent ones may indeed sympathise with your circumstances, but it doesn't mean they feel obliged to pay what you think it's worth if they can get what they want for 10K less from somebody more desperate to move than you are. Only rich philanthropists might buy for the seller's sake, I imagine 99.9% of buyers, however kindly, are not really concerned with what you paid or how much you spent doing it up, they are focussed on what they can get for themselves and how little they can get it for. After all, any saving they can make on the purchase price is probably going to make a significant difference in their own lives.

There will always be two conflicting principles at work in property valuation: a) the realistic value dependent on the local economy, and b) that the true value of anything is what somebody is prepared to pay for it!

Advertised prices of properties are no indication of the true market values.....The only properties that you see advertised are the ones that haven't sold yet!

All I can say is that if you buy something very cheap just for eventual selling for a profit or even to live in, by the time that happens it may well have completely fallen down!
No-one knows how long the recession will last and I am sure that buying anything really cheap will not be worth renovating. Property in Bulgaria is not like buying in Britain or even in France or Spain. They were built to provide shelter as cheaply as possible in villages and maintained to a very basic level. I would ask anyone living in Bulgaria permanently to disagree with me.
There may well be a few folks who have lived in really basic accommodation, but they are few and far between and anyone coming from a home which has all mod cons, whether it be in Britain or Europe, will have their eyes opened by the poverty in Bulgaria. I did and I bought a house for 14,000 euros in 2004. I spent 10,000 euros to get it to a very basic standard which I am pretty sure no Brit would find suitable. It all depends on what you expect from your home.
I can confidently say that there is no property (other than a complete ruin) for sale in our village under 20,000 euros and that would still be with an outside loo and no inside bathroom or stairs to bedrooms. Bulgarians are a hardy lot. There is a small plot of land for sale at 12,000euros and you would still have to build on it. The locals will not use agents because they won't pay the commission which is often very high and they will charge buyer and seller. 5 or even 10% is not unheard of. Locals who own property are actually priviledged to own Grandma's house and an apartment in VT mortgage free so they can afford to wait.

This is what I was saying about old houses too, if you pay no more than the plot is worth then it doesn't matter if the house falls down, you paid only for the regulated land with it's building footprint, mains water and electricity. If there's a usable building on it, whether an old house or a barn, that's a free bonus. We did that in Scotland, bought an old shack on a big plot, but I offered only what the land was worth and the offer was accepted. We'd originally planned to put a kit home on it but decided to renovate instead, and since we did all the work ourselves we only had materials to pay for. It was a uniquely desirable plot in a superb position, certain to hold it's value. We made it even more desirable by planting fruit &
nut trees suited to the climate (rare to find in that locality) giving it very strong appeal for the niche market we eventually advertised it to when reluctantly we decided to move away.

If buyers are looking for an up-to-date house to live in then they should consider the value of the plot plus the cost of having a house built on it. In any country, that's dependent on the price of materials and the local costs for labour and trades, architect's fees, project manager and permissions etc. In most places existing property is cheaper, so one way to find an accurate value for a house in your location is to cost our the price of having a new one (with the same features as yours) built on a similar plot. Then knock off the % difference between the price of new and existing property in any area of your country where sales are brisk.

For every way in which the existing building is inferior to a new one or needs parts replacing, you knock off the appropriate sum, right the way down to the house which needs wholly replacing and therefore you only pay for the plot. Surely, logic makes a wiser option than opinion when it comes to important matters like property investment, wouldn't you agree?

I do indeed agree Fruitlover. I have such a property which I am waiting to move into. It is on a very desirable plot with views and privacy. This was the deciding factor on purchasing it. However, I believe there would be many such plots in Bulgaria on websites which are still not selling. I have no idea why because I am also pretty sure people would now negotiate. It comes down to the fact that people haven't got money to speculate now in the financial climate and anyone cash rich ( there are always some) would not buy in poverty stricken Bulgaria. Some see the beauty of Bulgaria and make compromises (like me) but others would rather choose a place for holidays in more attractive locations like Spain and France. I hear that property selling in France is not suffering so much as elsewhere in Europe.

This is true Oldun, and covered on the threads asking what do people want and why people are not buying in Bulgaria. I was trying hard to stay on topic for once, being also prone to digressing! This thread is headed PRICES, yes?

oldun wrote:

I have no idea why because I am a I hear that property selling in France is not suffering so much as elsewhere in Europe.

In a recent survey carried out by The Telegraph newspaper, France was the most popular country in the world for people to go and live, Great Britain came a miserable 25th on the list, what a surprise!!

Expats selling here in Turkey are looking to relocate either in the UK or Bulgaria, so there is some light at the end of the tunnel. Prices of property in BG is the main reason for this, their intention is to buy cheap and renovate and still have a lump of money in the bank. This is the presumption of course, the reality of the situation may prove to be well different. I have been advised by a friend who is a qualified joiner that only 3 or 4 out of every 10 men have the knowledge or ability to do a half decent DIY job on their homes, so there should be plenty of work forthcoming for BG or British tradesmen to work on Brits properties coming out to live in BG. As for ourselves, we are still looking for a buyer here in Altinkum, if any forum members who want to move back here, we have a lovely Ground Floor 3 double bedroomed Duplex and two large bathrooms with a large private garden and it's own front door in a block of only 6 apartments with no communal costs. The apartment is in a very quiet road and is only a five minute stroll to the beach. PM for further details.

Eric

I have just gone back to Fletch's original post where she is asking why people are selling up and the differing prices that are being asked for properties. This topic has really now covered all the bases and the other property topics all gell into one. Bulgaria is the poorest country in the EU and it shows. People living in Britain cannot possibly understand how poor Bulgaria is until they experience the reality. This is poor quality food, implements, building materials and most other things that a Brit will need when living or holidaying here. Tourism should have been the goose that lays the golden egg but, its blown that with poor quality and high prices. When people sell their property the buyers might ask why they are doing so and then find out that the sellers will negotiate. Its not what the market is but what a property has which someone wants and accepting what someone is prepared to pay. Of course, that is if the seller can afford to take a loss. Many can't unfortunately. Fletch has her ideal property near the coast and reduced the asking price and to date I presume its still for sale. So we are back to the same question and the answer must be that people can only afford to pay so much and will wait until they find something that ticks all the boxes for the money they can afford. Sensible and there should be somewhere where this property exists but it will take some finding.
Someone mentioned that there should be a market for good British Builders but even they will only be able to buy Bulgarian building materials which often fall short of ideal and building methods are very different to those Brits would be used to. To use anything quality (imported) will cost and many Brits will not pay the prices builders would have to pass on, but that's another topic entirely for those in this business already.

Taking the long term view, the World is supposed to be going greener? Yes it's a slow process and some countries are still learning how to do things more advanced countries are already banning because of the pollution they create, BUT : there are now people building from new in Cobb, Thatch, Adobe etc, with superb results. Existing building materials in BG may lack quality, but research into better, stronger, more durable mud brick would make good sense. Cement (and therefore concrete also) being very un-life-friendly to produce, it's surely time to be moving away from such so called "
Traditional"
materials and putting our skills to work inventing better greener alternatives? Nobody wants a mud brick house that crumbles but that shouldn't rule out mud brick, t just means new research is needed to create a superior product.

Likewise most people will have heard at some time that MDF, chipboards, and most laminate flooring, give off toxic fumes that are unhealthy for us. Why does anyone still put these materials in their homes? One reason for me to move from UK to BG was to get away from all the plastic artificiality, I don't want my surroundings to look like wood if it isn't, imitations and fakes pollute our environment in more ways than physically! Surrounding ourselves with things pretending to be what they're not isn't a healthy way to live.

Grand Designs has featured some superb new builds from such things as Green Oak, where all the joints are constructed from the material itself and don't require hardware to hold it together;
and straw bale, very thermal-efficient and rendered with lime mortar to a beautiful and unique finish. I think it's time we were baling bracken for the purpose, instead of regarding it as a nuisance and trying to obliterate it. The traditional "
Black Root Thatch"
of the Scottish Highlands is by far the longest lasting even in that wet climate and was made from bracken that was pulled up rather than cut, laying it onto the roofs leaving only the (black) root portion exposed. Yes the way it used to be done was labour intensive and time consuming, but I'm sure today's innovators are well capable of devising fast cost-effective methods of harvesting, preparing and applying this and other abundant wild materials.

Green oak framing is currently expensive because it's hand crafted, but again that shouldn't lead to "
Can't afford it, full stop"
. This is where we put our brains in gear and start figuring out ways and means. "
Labour intensive"
and "
high unemployment"
have a relationship that seems to get swept under the carpet a lot! That's why I'm saying this under "
Prices"
because it all does seem relevant to building and property costs.

That said, do the majority of you think this all seriously cranky - am I boring you - or does anyone else find the possibilities for creating a healthier World as exciting and inspiring as I do? If I started a thread called something like' Green Building in BG' would anybody want to contribute ?

Yes I think they would Fruitlover. I remember a while ago on another forum, that there was a topic on straw bale building. In fact, I know someone in Hotnitsa had a website showing the building of their straw bale home. Wish I could remember who it was for you. Also, I hear that Bulgaria is in line for a big solar heating project. One of the places suggested was in fact, near my own village. I believe I read it was investment from a Japanese company. Maybe Google 'solar heating Bulgaria' would bring it up.

The website for the straw bale house is [You must be registered and logged in to see this link.]