My Bulgaria: Forums

michaelvlas · Posted: Thu Jul 03, 2008 4:51 pm Post subject: Banks not lending

subject Urgent bank issue affecting BG tourist centric developments

Good afternoon,

We are emailing you because at some point Bulgarian Home Loans has had communication with you.

Yesterday we met with InvestBank and news was confirmed to us that will have an affect upon all Bulgarian Ski and Coastal Tourist areas.

We are today writing to and emailing all of our 249 Ibank clients to make them aware of the banks stance.

Basically they will not value any properties in Tourist areas at above E500 per square meter.

This means that clients will not get loans of more than E350 per square meter.

We have attached a letter that we have sent to all affected clients.

We are increasingly witnessing all lenders taking a negative attitude towards valuations in tourist resorts.

We wanted to make you aware of these changes as soon as possible.

We are desperately trying to manage the fall out from these developments and hope that you can understand that this issue is something that we must all work together to solve and that attempting to blame the bank, developers, planner or even BHL will not be constructive.

If you have any questions then please at this stage respond by email only.

Kind Regards
Chris Downham
Managing Director

Mat · Mega User! Joined: Feb 28, 2005 Posts: 1849

Another year and it'll be time to buy

Royboy · Posted: Thu Jul 03, 2008 6:21 pm Post subject:

Proof positive that the bubble has well and truly burst. This will mean disaster for properties in these areas.

houseman · Posted: Thu Jul 03, 2008 7:56 pm Post subject:

Sorry, but who are Investbank, and how do they control the supply of money to developers and purchasers other than through the one company mentioned - Bulgarian Home Loans?

Just asking.

Chiro · Posted: Thu Jul 03, 2008 7:57 pm Post subject:

I think disaster is a bit strong of a word. Everything has its cycle and we are at the bust end of it. Mat is correct wait a year and then start bargain hunting. Or even start now because I am sure there are many getting desperate.
For the rest just strap yourself to the mast and hang on. If you didn't overleverage yourself life will be great, just give it time. You can't lose money unless you sell.

BenC · **Property Sales/Rentals** Joined: Nov 07, 2005 Posts: 192

on the flip side of the coin last month we had a property valued at 950 euro pm2 in Pamporovo - the sales price is 680 euro pm2. Raifeseinbank were the bank in question!

Mat · Mega User! Joined: Feb 28, 2005 Posts: 1849

Its entirely possible that with the market tightening they are just trying to squeeze out the middle men - companies like BHL may possibly have been necessary a few years ago to bring the borrower and lender together but are pretty much redundent these days. All the big lenders have documents in foreign languages and staff with experience of dealing with overseas customers now.