Decline in uptake of resort holiday homes
10 March 2008
After risk-averse banks turned the tap on loan-financing for coastal holiday developments, investors trying to raise funds for ski resort projects also seem to be running out of options. One of the reasons is the sharp decline in uptake of resort holiday homes over the last 7-8 months caused by the pullback of British home buyers, according to experts.
The financial institutions have been shying ski resort developments in the past 4-5 months, said Nikola Stoyanov, manager at Bulgarian Properties.
Krasimir Dimitrov from Source confirmed the trend, saying that the banks deter borrowers by raising the loan-financing bar too high.
Tihomir Toshev from Creditex said that an Address Group company, it would be an overstating to say that loan-financing has completely dried up when lenders are simply being more cautious and risk aware.
In the Black Sea resorts, the exodus of British buyers is partly offset by demand from Russians, Ukrainians and buyers from Scandinavia but the deals in the ski resorts have plummeted tenfold, said Stoyanov.
Real estate consultancy Colliers International has also just reported a decrease in the uptake of residential stock.
Although the banks officially reject any suggestions that they have changed their lending policy towards the real estate sector, off the record, industry sources admit a certain pullback mainly due to two reasons: the more expensive lending resource in the wake of the global credit crisis and the negative trends emerging on the property market.