Russian Rubel devalues by 9.5% against the Euro forcing up the cost of Bulgarian properties

The past months have seen unusually high fluctuation in the currency markets leaving the Russian Rubel coming off worse; today down by 9.5% against the Euro by comparison to the beginning of 2013. In the first week of January 39.36 Rubels were needed to buy 1 Euro, by the end of June it has shot up to 43.61 Rubels. The nominal difference effectively means that our Russian buyers have less spending power and lower budgets, but unlike most markets this does not mean they cannot buy Bulgarian properties, it simply means they can only afford to pay less; as the sole demand we can already see vendors taking the hit rather than the buyers.

Several buyers in the process of completion are attempting to renegotiate the agreed buying prices, naturally with contracts signed and deposits paid they have no avenue to succeed, but the currency impact is clear. The Bulgarian resale market for holiday properties is dependent on a stable Rubel, ideally strong against the Euro that can enable Bulgaria to export its property offers at a weaker and cheaper price for the Russian interest to acquire. In almost any other instance the demand of other parties trading in other currencies would sweep in and buy up what the reduced Russian demand cannot afford, but in this market there are almost no other nations interested other than those using Rubels from the ex-soviet block.

Without a secondary source of buyers on the horizon, those seeking to sell property assets in the Bulgarian holiday resorts will need to continue to pander to the Russian demand by fluctuating their asking prices in alignment with the requirements of those spending. Whilst prices look to be relatively stable this summer and the volume of interest ever so slightly up, the supply of properties still shows no signs at all of slowing, thus providing the excessive choice for those willing to buy continues. The classic conditions of a buyer’s market are definitely with us for another season, we can only hope the Russian interest will remain into 2014 too.