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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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Spain: Interest Down, Prices Up... But For How Long?On the residential real estate market Spain has followed the same path like many other European countries in the last months. Given the stock exchange uncertainties and low returns on other investments like government debt, the small investors have increasingly turned to the real estate as a way to keep their portfolios growing. The market remained strong even after the period of Euro introduction when "bags" of hidden money flooded the real estate sector. The reduction of the average mortgage rates (from 6% to 4.8%), which followed the introduction of Euro notes and coins as well as keeping stable the economic numbers explain partly the boom in demand. In the last 2 years the economy growth was 6%, which is an excellent result for a medium size European country. In the last 4 years the real estate prices in Spain have followed only one direction going north and the local experts expect that this trend may continue in the next months and with limited impact even in the next years. Some see in this phenomenon the results of the fact that the urbanism system of Spain is concentrated in the hands of small number of developers and builders*. This in turn favors the inflationist trends on the market with no special regulations to stop these artificial increases**. The smallest increases have been registered in the last 12 months in some of the most expensive cities in Spain like Barcelona ($2.400, +5%), San Sebastian ($2.400, +5%) and Madrid ($2.100, +5%). Among the provinces in Spain the biggest increases have been seen in Castillo (+29% to average price of $770 per sq.meter), Guadalajara (+26% to $900) and Alicante (+25% to $930). Tourists' zones in some provinces have experienced the strongest gains with almost 100% increase in the last 3-4 years. But for how long such positive trends may continue? It won't be exaggerated to say that the booming market now is supported mainly by the low interest rates and the continuing influx of foreigners. But even with such bonus for the buyers as the cheap mortgages they now have to spend between 37% and 52% from their incomes to cover the monthly payments. Even the slightest interest rate increase could impede the demand bringing down the activity in the whole sector. When this could happen? The interests in the Eurozone won't be increased right now given the war preparations against Iraq. But maybe by the spring the European economy will go up and the interest rates will follow.
---- ** By the middle of 2002 the sq.meter (appr. 10 sq.feet) of new residential construction has reached $1.300 (an increase of 16% in the last 12 months). At the same time the resold residences increased their value of 17% reaching $ 1.050 per sq.meter).
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See also the directory of companies providing real estate services in, and general real estate information of Spain.
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