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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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Real Estate Interconnections - part 1To understand what causes the real estate market ups and downs it isn't enough to look just at the banks' interest rates. They are very important but by far not the only factor that shapes the market. Looking for the ideal location for living and for investment many other issues come up to determine whether our project will be successful. Many of them has nothing to do with the real estate, some are as distant as Russia is from Venezuela. Yet they also make their contribution and thus should be kept into consideration every time we go shopping.
Personal security does matterMany people consider to be secured by the state as something that is granted. The government, to use the Max Weber's classic definition, is an agency that has a monopoly on the legitimate use of force over a given territory. Thus to have a government means to be protected. But not everywhere this is the case. There are territories without any legitimate form of governance. Somewhere the government is just the biggest thug among the myriad of thugs. People sometimes go for protection to smaller thugs in order to feel safe and protected from the biggest one. Living in such conditions is like seeing unfolding the Hobbes' "state of nature" where everyone wages a war against everyone. It isn't necessary to have undeveloped market under such circumstances. The capital returns may also be above the average level if you're lucky enough to collect your money. The trade-off between higher returns and insufficient personal security is a tough choice. It isn't a game for faint-hearted. Only the strongest will survive.
International security matters tooInternational factors also can play a prominent role in shaping real estate markets. Great powers can try to undermine other great powers' influence not by directly attacking their interests, but by weakening their regional allies. On the one hand, this may lead to market collapse in the proxy states by encouraging civil conflicts and public disorder. On the other hand, this may have long-lasting repercussions for the winning and the losing great powers alike. For the smaller states some problems seem incomprehensible without taking into account the great power's games. For example the tensions between Venezuela and Colombia have important international dimensions which centers are located in Washington D.C. and Moscow.
So does the macroeconomic climateThe way governments shape the macroeconomic climates in their respective domains also affects the cost-benefits analyses made on microeconomic level. Here we may include the "dolarizations" of some economies, which erase the investors' risks linked to the currency exchange rates. Another important macroeconomic factor is the tax policy that makes trade-offs between collecting easy money and securing long-term economic progress. On the border between the macroeconomic policy and the personal security is the issue of government attitudes toward investors, domestic and foreign. Countries where the foreign investors enjoy better conditions than their domestic counterparts create inherently unstable investment regimes. Investments that are made under some conditions can suddenly be devalued by applying new conditions.
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