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Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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One property in Bulgaria - two different prices. Guess who is losing?
The second option is to keep high the prices and rents until the demanding side accepts the rules of the game imposed by the suppliers. Such a scenario may occur only when sellers (landlords) represent some kind of monopoly on the real estate market or the supply is much smaller than the demand (which is quite the opposite considering the Bulgarian case). The third scenario is to reconcile the two sides of the transaction - to lower the sellers high expectations and to increase the prices the buyers are ready to pay. This will be a win-win game, something very common among the market oriented societies but very unusual when it comes to a former communist country like Bulgaria. The conventional wisdom can't find other options of how to resolve this dilemma of higher than market accepted prices and lower living standard. In Bulgaria where the market mentality is weak but the will of bypassing the fair market rules is strong and widespread, there is a fourth option, some kind of oxymoron*. Let's begin explaining this new option with a brief look at some practices inherited from the communist past of the country. There was a time not so long ago when customers in Bulgaria paid in fact according to their nationality. If you spoke Bulgarian fluently you were allowed to buy goods at lower prices but weren't permitted to step inside a special chain of stores deserved only for foreigners and for some Bulgarians that have worked abroad and had a chance to keep US dollars. Under communism foreigners could go shopping and freely spent their dollars in the special stores but in the ordinary restaurant they were charged with different (more expensive) rates. These far from the pure market practices exist even today. Foreigners pay more when they check in at some hotels. Their museum's tickets are also more expensive. This is how our real estate oxymoron is created and is growing. In Bulgarian magazines specialized to post sellers' offers 1 sq.meter (10 sq.feet) of residential space in the most expensive street in the capital city of Sofia doesn't exceed $450. Now let's take a look at the on-line offers where we can see that the same properties are offered for $550-600 per sq.meter. The difference is obvious. The reason for this is that the Bulgarian magazines are made exclusively for Bulgarian-speaking readers. The on-line real estate sites instead may be accessed by foreigners too. "They have enough money, they can pay" is the logic that stands behind these different prices. "They" means every non-Bulgarian-speaking person, in other words almost every foreigner. The real estate agents who post such exaggerated on-line offers are fully aware that at some point the foreign buyer will understand the real market price of a given property. Their way of thinking may be summarized as following: Foreigners are the only ones who can pay the price demanded by the sellers. So the higher than the market price has to be kept as long as possible. The fact that foreigner is interested in this property is a proof that s/he HAS the money wanted in the offer. Even if the eventual buyer understands the trick, the seller and his broker know the most essential - they have a customer that IS READY to pay THEIR price. Any difference in the final price will be only a small correction to the initial offer. The most important result is that the price paid is exceeding the market level, that the seller didn't make any substantial compromise with his initial offer and that because of such tricks the prices are kept higher waiting for another foreign customer. * - Oxymoron - Contradiction in itself, something that can't exist in the nature.
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See also the directory of companies providing real estate services in, and general real estate information of Bulgaria.
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