Varna, Bulgaria – Property Investment

Varna is a significant trading centre, commercial sea port and is situated on the northern Bulgarian coast. Varna and the surrounded resorts of Golden Sands, Sveti Konstantin, Albena and Balchik offer some of the best soft sandy beaches in Europe.

The area has become an increasingly important summer holiday destination with many visitors from the UK, Germany, France as well as the traditional visitors from Russia and other parts of Eastern Europe. The economy in Varna is strong and it is experiencing large investments in major new city centre projects, including residential and commercial developments. The average salaries are rising strongly and a professional person will be receiving double or even triple the salary from 5 years ago. The joining of Bulgaria into the European Union in January 2007 has added to this inflation which is set to continue.

The property market for holiday homes is also strong in Varna. Balchik to the north is surrounded by three golf courses and the magnificent Albena resort with superbly maintained beaches have attracted significant investment from foreign buyers in these areas. This also looks set to continue with the emphasis on high quality construction near the beach, or properties that offer lifestyle opportunities, further away from the main investment areas.

Interest rates are currently around 6% but the Bulgarian lev is tied to the Euro. It is expected the lev will be replaced by the Euro in 2009. This will lead to a parity in interest rates making Bulgarian property more affordable in the future and therefore a good time to buy property in this expanding market.

Bulgarian property is relatively inexpensive to build, approximately 700 Euro per sq m. This is about 40% less expensive than in the UK. However, with the cost of building rising rapidly in Bulgaria, it will not be possible to build in 2010 at the current real estate market price average of 1000 Euro per sq m in 2007.For more information about Varna or Bulgarian property investment go to:-

Euro Pounds Currency Exchange – How This Affects Your Bulgaria Property Purchase

Sterling hit a fresh two-week low against the euro and also lost ground against the dollar on Wednesday after UK growth data which came in line with expectations prompted some position adjustment. Britain’s economy grew 0.6 percent in the first quarter of 2006 with the annual rate of 2.2 percent, exactly in line with analysts’ forecasts. Service sector growth slowed to 0.6 percent, after growing 1 percent in the last three months of 2005, due to weaker retail and car sales.

“The data was bang in line with expectations,” said Ian Stannard, currency strategist at BNP Paribas. “We are seeing cable coming under pressure in a corrective pullback after the gains we have seen in the past couple of weeks.”

By 0845 GMT the pound fell to the day’s low of $1.7806, down 0.3 percent on the day, off Tuesday’s seven-month high of $1.7943. Elsewhere, ECB executive board member Lorenzo Bini Smaghi said that if the European economic recovery strengthened, the central bank would adjust rates to avoid inflation, in comments published in an Italian newspaper.

Meanwhile, ECB governing council member Axel Weber told Bloomberg television that risks of second-round inflation effects had risen. Most analysts expect the ECB to wait until June before raising rates from 2.5 percent after ECB President Jean-Claude Trichet earlier this month doused widespread expectations for a move as soon as the May 4 meeting. Even so these comments will serve to put further pressure on Sterling in the coming months.

Interbank rates

GBP/EURO – 1.4340

EUR/GBP – 1.4389

EUR/USD – 1.2379

GBP/USD – 1.7790

USD/GBP – 1.7850

GBP/AUD – 2.3880

GBP/NZD – 2.8370

GBP/CAD – 2.0140

GBP/CYP – 0.822

GBP/AED – 6.535

GBP/ZAR – 10.95

GBP/CHF – 2.2610

GBP/PLN – 5.5790

GBP/CZK – 40.767

GBP/THB – 67.17

Part 1 – The Free Property Inspection Trips to Spain – Warts and All

In my experience snagging new properties for clients in Spain’s Costa Blanca, Calida and Murcia I regularly come into contact with sales reps and managers working for the multitude of estate agents who operate free or subsidized property inspection trips. I deal with clients who have either fallen for some of the sales tactics or “untruths” and the truth often hurts, sometimes financially. This article aims to furnish clients with some of the facts, so that they are armed with some information before they make a huge financial commitment.

Of the nearly 60,000 people each year to leave the UK and head for the sun drenched Spanish shores nearly 20,000 of them do so having been on a free inspection tour.

There are a multitude of companies covering virtual all areas of Spain and employing a variety of sales methods to get you to part from your hard earned cash or perhaps more importantly get you to release the equity that you hold in your property. The one thing that hey all have in common is they need leads/clients/tours/bums on seats/cannon fodder.

Some companies are backed by large corporations, such as banks or developers; some are no more than jumped up UK high pressure sales companies who are trying to make a quick buck in a new market.

The tours often include he following.

Return flights for two, Luxury 4 star hotel accommodation for 3 or 4 nights, Breakfast in the hotel, Evening restaurant meals, Use of liveried company car and tour guide (aka sales person).

THE MARKETING TRICKS. – Gaining your attendance.

These agents market in decidedly different ways:

Some spend fortunes on glossy magazines, with artist’s impressions of your dream off plan property. These pictures in themselves can be very misleading as they often have the sea in the background but in reality they are 10 km inland. They will show lush green gardens with not another property in sight, yet in reality and under much closer inspection the partition wall is 1 metre from the house wall and the development is virtually a new town being built – a wall of white washed euro boxes as far as the eye can see. The lush green garden will be the remnants of a builders site covered with an inch of topsoil. Beware when digging holes as a sprained wrist is a real danger.

With some agents you will receive a phone call one evening. That competition entry form that you filled in at Alicante / Murcia airport the last time you were on holiday could lead to a series of calls to gain your attendance over in Spain. As these companies get more desperate for clients you could find yourself at the end of a phone literally days after you returned from holiday. These telesales operators have been know to call clients into submission, getting them to fly over just to stop the persistent nature of the calls. Of course there is no point in calling the Telephone Preference Service as the calls originate in Spain and are out of their jurisdiction.

Some agents spend tens of thousands advertising on the TV. “Our property experts are flying in this weekend to share their experience of living the Spanish dream. They will be at the Jubilee suites at the Anytown football ground / racecourse / hotel this weekend”. Sure enough when couple arrive there are a team of informed reps that do in fact live in Spain and do fly in each week to a different part of the country to spread the dream. They also include a financial expert and a credit card machine and an internet connection to book your flights. The trick here is that although the flights are free or subsidised you have to pay for them on your own credit card initially for “security” reasons and your money will be returned in full when you touch down in Spain and paid in Euros to give you some spending money.

Another marketing method that the agents have been trying is called the home visit. A practice developed from the double glazing industry, where the client is called and told that an expat property expert is in the area for the next couple of days and rather than come to our offices, they will come and see you in the comfort of your own house. “Allow an hour or so and they will answer any questions you have about relocation, holiday homes or investments” is the pitch of the telesales staff. The salesperson or relocation consultant as they like to be known will in true style stay as long as it takes.

One of the sneaky sales tricks that they use is just before they arrive the salesperson will drop a call to their manager to say they are going in to the clients house, a couple of minutes after they have been sat in the house don’t be surprised if your home phone rings. I will be the salespersons manager ringing to falsely state that the reps previous clients have been awarded a huge flight subsidy and there is only one subsidy left for the month… creating a little urgency in the client for fear of missing out.

This is a tactic used in double glazing or timeshare when the salesman states that this offer is only available today and tomorrow the product will cost thousands more. As soon as any interest is shown the rep will have their laptop open and be booking you flights. They will then push you to travel at a time that suits them rather than you by offering flight incentives, these also tally with the commission that they earn. As an example of how much these companies make out of sales, the home sit rep can earn EUR50 for just turning up, EUR1000 for booking you (subject to you actually turning up) and a further EUR1000 should you buy.

Of course the point of all these methods of marketing is to get your bum on an airplane seat and out to Spain with the minimum delay. Do not be surprised that if affordability in Spain is an issue, they will try and sell you an apartment in Bulgaria or Turkey and if finance is again an issue they will stoop as low as selling a plot of land on a barren coast in Brazil that you can pay for on the spot using your credit card.

The rep that you meet in your house, on the phone or at an exhibition is without doubt a self employed commission only salesman who will furnish you with all the details you wish to hear and non of those that you don’t. It is very common practice for these companies to employ their staff on self employed, commission only sales positions. This of course is much cheaper for the company, they can let staff go with little prospect of any legal comeback and without paying their back commissions. The reps themselves are hungry as they need to sell to earn, which can lead to some hard sell tactics being employed to gain the sale. Please do remember however that if you are going just for a look or as some people have done on a “fag run” that these reps are working from 9am to 11pm for free!

Some companies offer completely free flights as long as you travel when they want you to. Some will state that the cost of the flight will only be £50 and they will subsidize the rest and some will subsidize the flight to the tune of £50.

As the market tightens and more and more of these agents disappear the degree of generosity diminishes at about the same rate as the exchange rate. This should be taken as a warning as the agents need there pound of flesh and as fewer clients travel in the first place and even fewer of them purchase the agents need to extract every last euro from the few remaining purchasing clients.

Now I have covered some of the marketing methods, I will cover the actual inspection tour in some detail. I am not quoting one company but a mix of all the companies; however you will find that they all offer virtually identical experiences. I am using experiences gained personally, from ex reps and sales managers and from employees who still work for several of the big agents on the Costa Blanca, Calida, Murcia and Costa Almeria.