Price bubble

Price bubble – this term is used in the Commercial Law, where details a situation in which an item has been advertised with hugely increased sale price – much more than this item actually costs. For example, the prices of prices of real estates in certain region may be increased up to price bubbles, with speculative intentions. It is usual that after some times the prices quickly reduce down to their normal levels. At the end of the day the speculators have made good profit, but the trustful investors end up with huge losses, not likely ever to be covered from the value of this concrete item. For example there has been a price-bubble of off-plan properties in Bulgaria during the period 2004-2009, while trustful west-European investors (mostly from the United Kingdom and Ireland) paid a lot of money for apartments and properties, which shortly after that became three times cheaper. So the only one who made profit were property speculators, non-regulated local and overseas real estate agents and smart developers, but not the trustful investors, many of whom ended with no money and no apartments – due to failed off-plan soap-bubble projects.

Read more about off-plan Bulgarian developments: www.bulgariandeals.com

Posted in: P