The global financial crunch has had its effect in the tourist resort town of Pamporovo, Bulgaria. The flats available in the numerous apartment estates recently built in the town have declined sharply in value, according to Yavlena GEOS, a real estate agency based in Smolyan, quoted by website stroitelstvo.bg.

The first decline in value was observed in the hotel-apartment complexes, especially in the cases where there is a larger loan taken out for their construction.

On the internet, there are offers selling apartments in the hotels for three million euro, or the equivalent of 475 euro for a square metre, whereas the typical detached apartments in Pamporovo that are on offer now go in the range of 900 to 1200 euro a square metre.

The drastic decline in the value of the apartments is a consequence of the sharp decrease in demand from foreigners to purchase property in Pamporovo. This is of course is accredited directly to the global financial crisis which is hitting the westerners hard, and with Western banks being reluctant in releasing loans for the purchase of property overseas, fewer people in turn can afford the mortgage payments and the interest in Bulgarian based apartments has dwindled.

Until now, British clients were the main players on the market, with Irish, Russian and Spanish expats in close pursuit. However, there are fewer foreigners interested in buying, instead there are now cases of foreigners re-selling previously purchased property in order to reclaim as much as possible from their initial investment, Yavlenasaid.

The wind of change is being felt on the market in Smolyan as well, with a sharp decline in the demand for property in the last several months after loan interest rates have gone up to further hit the already shrinking demand.