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SulphaTerra

>People are maniacally scared in here (Plovdiv) and buying residential properties en masse. Well that's one way to cause inflation!


Plenty-Amphibian8525

This the way to cause rises in the prices, inflation is a different story


AMerchantInDamasco

Sure, because raising prices and inflation have nothing to do with each other...


Plenty-Amphibian8525

The raising in the prices in real estate doesn’t necessarily mean inflation (a raise in all products prices), no? The raise in real estate can be caused by inflation but not necessarily every raise is inflation.


AMerchantInDamasco

Well, raise in real state prices will trickle down to a raise in all prices in the end, since rents will go up for businesses as well. Edit: On top of the above, inflation should be calculated including real state prices as its part of the COL expenses.


Ok_Breakfast_5459

Expect prices to be at least rounded up. Especially in low cost items, you may even see double or triple prices.


[deleted]

Here in the Netherlands prices definitely rose with the introduction of the euro due to rounding and such, but also other reasons (the government increased VAT by 1.5% around the time of the euro introduction). Price rises were especially noticeable in bars. Prices of beer rose a staggering 9% overnight. And while 9% now seems moot with current inflation, back then it was huge. People still talk about the price increase of beer in 2001.


HucHuc

The rounding should be down actually, not up. 2lv is 1.02 EUR by today's rate.


Ok_Breakfast_5459

My sweet summer child. 2DMs were exactly 1 Euro. No need for rounding up or down. Ask the Germans what happened.


HucHuc

2DMs were NOT 1 euro, check your facts.


Ok_Breakfast_5459

I stand corrected. It was one Euro for 1,95583 DM. That is not exactly 2 DMs.


HucHuc

The rounding should be down actually, not up. 2lv is 1.02 EUR by today's rate.


[deleted]

Afew rhings that need clearing up. The euro by itself DOESN'T cause inflation. I's probably one of the most inflationary stable currencies in the world right now. Only with last year's exceptionaly high inflation we finaly achieved the long term ECB target of an average inflation of 2 % in the period since its introduction in 1999. The euro by itself DOESN'T cause price hikes and price increases. People do. And with people I mean the retailers, the markets, the distributers, in go-betweens, etc. The euro is a currency - a means of transaction. It's up to the people to set prices. You should put your politicians under the spotlight and make them implement legislation for the protection of prices in the transitory period and beyond. Don't go the criminaly idiotic route the Croatians used for euro adoption.


[deleted]

[удалено]


necroholda

Out of 148 city samples from all over of Europe (not EU), Plovdiv is on 121st place in Numbeo's "Property Prices Index by City 2023". So the RE prices has some more room to grow if we got to be honest, prices could be worse than this! :) [Screenshot from the index](https://i.imgur.com/ELLNiDd.png) ​ >The question is: will the Euro be adopted? Now, this is an interesting question and obviously its just a guessing game. My personal view is that it is a political risk to introduce the Euro and let Bulgaria in the Eurozone at the moment. Too much risks and no so many benefits for the whole of EU. I mean come on, we are around 6 mill people in here while Eurozore is 340 million. The political situation in BG is a complete shitshow, abosute lack of trust and civility between all parties, be it the electorate or the political parties themself. So based on the risks and political instability, then NO! I don't see us in the Eurozone in the near 3 years honestly... So from the above standpoint, it would be wise to enter in standby mode and just wait for 1-2 years. Maybe there is a possibility of the RE prices dropping slightly lower due to increased mortgage rates, I have heard Liebherr laid off around 100 ppl from their Plovdiv's factory, definitely a bad sign... \*typos


etnaakul

Croatia had the largest rise in real estate prices last year in all of EU because most of illegal money was laundered that way before introduction of Euro. Probably same thing will happen in your country as well (or is already happening). And yeah, prices of many everyday items were rounded up or went 10-20% up the next day. Don't trust ECB apologists in the comments :D


necroholda

ok, if true this explains a lot!!! idk how corrupt is Croatia but Bulgaria beats it by a landslide!! Here mafia has a country, not the other way around lol


[deleted]

The ECB isn’t responsible for managing price legislation in Croatia, there is a parliament for that.


etnaakul

No one is blaming ECB for failures of local regulators, but that last part of my comment was referring to ECB 'massaging' numbers to keep the narrative that Euro introduction has minimal (sub 0.5%) effect on prices, when obviously that effect is much stronger, especially in service industries.


Besrax

Disclaimer: I'm a Bulgarian. To answer your question, no. There will be some temporary price speculation by merchants, but it will go away. There is an ECB report that analyzes exactly this - what kind of inflation can be expected from the adoption of the Euro. IIRC, they attributed between 0.10% and 0.25% or so of total inflation to the adoption of the Euro in the different new members of the Eurozone. I reckon that Bulgaria should be on the lower side, given that its currency is already pegged to the Euro.


KenenisaBekele1

>but it will go away. Hello from Croatia, when is it supposed to go away? 5months and counting.


HucHuc

All of Europe has insane inflation right now, euro zone or not. Croatia is not an outlier by any means.


KenenisaBekele1

Sure. It's just that after Jan 1st a lot of prices got very rounded.


Thomas__GR

As a Greek: believe me, no. The price increase will not be temporary. On the first day that this happened, some stuff were just rounded up and most stuff went 200-300% up. And only increased further as the years went by. I see that the current exchange rate is 1 Lev equals to 0.51 euros. Believe when I say this: whatever costs today 0.50 Lev, the next day will cost 0.50€. Whatever costs 3 Lev, it will become 3€. That's the way it happened in Greece, simple as that. I hope Bulgaria has mechanisms to prevent that from happening, otherwise it will definitely happen. PS: This is **not** Inflation, it is just price increase. Inflation happens when the current amount of circulating money in the market is more than the values of goods. So technically, ECB is right. No significant inflation is to be expected by a country changing their currency. Problem is that prices can increase even without inflation.


Besrax

There are ways to prevent price gouging to a significant degree. I haven't looked into why Greece experienced such a severe inflation from the adoption of the Euro, but it wouldn't make sense for something like that to happen in Bulgaria. Our currency is pegged to the Euro, meaning that there will be little to no fluctuation on the currency side, nor can the markets lose confidence in our currency, thus affecting the exchange rates and pricing (perhaps this is what happened in Greece?). All prices in Bulgaria will be in both currencies. If something goes up by 200%, we will notice it immediately. The authorities will be cracking down on anyone trying to profit from the change. Look at Croatia, whose adoption plan is similar to ours - they have some speculation, but nothing major. Third, due to the way market economies work, an unjustified increase of 200 or 300% would only last temporarily. Perhaps the increase was justified to a large degree in your case. Nope, inflation means rising price levels. That theory that it means increased money supply comes from the Austrian school of economics and is considered contrarian/alternative. Inflation can be caused by other reasons as well, such as diminished supply and/or increased demand for products, which is what we saw at the beginning of the pandemic.


Thomas__GR

> thus affecting the exchange rates and pricing (perhaps this is what happened in Greece?) No, the exchange rates were the same, they did not change for years. Whoever wanted to exchange their previous currency with euro, was able to do it at the rate of 340 Drachmas for 1 € (so 3.4 drachmas for 1 cent of euro). Some standard products eg. from a bakery that would cost 100 drachmas were simply rounded up from 29 cents to 30 cents, but in the following 2 years that became quickly 1€. Other basic products that would cost 50 drachmas became overnight 50 cents. The merchants simply increased the prices by 200-300% and there was nobody there to prevent that from happening. That's why I said, I don't know how Bulgaria can tackle this but I hope there is a way to prevent it. If you don't prevent it, it WILL happen.


HucHuc

>The authorities will be cracking down on anyone trying to profit from the change. Yeah, about that...


Frequent_Fox971

Its important to mention here that most price increase actually comes from the economy itself (meaning internal service providers, industrie and so on), e.g. a restaurant raising prices because the opportunity is good. It has nothing to do with the Euro or the EU but with your fellow countrymen taking the opportunity. That's why croatia has passed laws that prohibits such behaviour.


necroholda

So it absolutely makes sense to store our savings in properties? It seems that the saved 50k euro that I have will become less,isnt it? thank you for your input.


Thomas__GR

If your question is if your purchasing power will decrease, then probably yes. But I have zero knowledge about the politics of your country. I do not know their plan. Maybe they can regulate the market to prevent speculation, I have no clue. What I'm sure about is that emptying the supermarket shelves in a fear of inflation, is an act that *actually* causes inflation even if there was never that danger there to begin with. If police officers start shouting that there is a bomb in a crowded concert of thousands and order everyone to escape for their lives, people will get stomped to death even if there was no bomb there to begin with.


sparky_roboto

I call bullshit on those statements from ECB. The change from pesetas to euros in Spain made a rounding effect in all prices but not salaries. This was hidden under the influx of EU money in the economy that made a bubble that popped in 2009. Inflation could not be seen in the moment thanks to the increase of GDP because EU companies where getting everything as a sale.


Besrax

They don't claim that there is no initial inflation. Their argument is that eventually the market mechanisms take over and the prices normalize to what they would've been if the Euro wasn't adopted + 0.10 to 0.25% of "one-time Eurozone tax". This process can take months or even years, but it inevitably happens. From what I've read, that initial inflation is a lot more severe in countries that don't take appropriate measures to prevent speculation and liquidity problems, but prices eventually normalize either way.


sparky_roboto

You can't really fight speculation as you can't prioritise your own companies as that's forbidden in EU law as being not fair. Then Bulgarian companies are not as rich as the Germans/Dutch/Italians (you call it) so then they get can push aside the local ones. Liquidity becomes out of the country control as the national bank power disappears in favour of ECB. Getting in the EU has advantages but is not all good. Hope for the best for Bulgaria if this gets to happen!


Cartnansass

DOOM! /s


Zealousideal-Shoe527

Slovenia too, and this year in Croatia. Rounding


FirstTimeShitposter

I'm sure merchants will gladly lower their prices ;)


steinpowaaa

I am in Plovdiv right now. They gave u good answers regarding the euro situation. However regarding the property buyout, it’s because a lot of people from smaller cities come here to live and work. Most of them are interested in living in the city center - so this is where u see the biggest price hike.


necroholda

This is mostly true, agree. However, considering that we lost 800k bulgarians between the last two population counts, I would hardly believe the job opportunities in Plovdiv is the main factor for the building boom here. I have heard from numerous independent people of their EU adoption fear and property investing as countermeasure. This is why I need some thoughts from people who are more economically savvy then me. How do you think, would it make sense to buy a flat in Plovdivat the moment in order to save my money? Or take the risk and do nothing. I am asking because closing my savings in balooned property is also a RISK!!! many people dont go this far in logic, obviously this is an illiquid active and has its shortcomings. Thank you!


timwaaagh

In general yes there's usually some inflation. But the buying houses en masse thing is likely a booming economy. Congratulations.


Goldragon979

If prices go up, cross the border, buy stuff there and sell it again to your fellow countrymen. If prices are depressed now in Bulgaria, buy locally, cross the border and sell to your neighbour countries. A free market shouldn't allow much room for price differences like that, unless you believe joining the Euro will raise prices across borders.


rokky123

Just wondering, whats the current price of coffee with milk there?


necroholda

1 euro in a caffe, 30 cents from a public coffee machine


rokky123

That wont go up much i suppose. Maybe 10% spike, not much more.


Entropless

In long term you will get inflation but also significant rise of wages, and everybody will be better off


necroholda

I believe in this too,but what aboit the people's savings?


Entropless

Isn’t Bulgaria’s currency already pegged to eur? All the change will just be an accounting trick, no real changes will happen


necroholda

Yes BGN is tied to eur, how exactly I cant tell without a ggl search. The consensus is that the decision to bond them together was a blessing for BG. However there will be speculation thats for sure...


Power_of_Baguette

Look how it went for Croatia recently. How Greece was treated in 2012. Now consider changing your corrupted politicians that will only bring misery in your country.


necroholda

My fellow Bulgarians are as corrupt as it gets. The politicians are just the elite corruptioneers that made it to the top. We are at such a degradation level that people are no longer even discussing the political affairs at this point, let alone changing anything. So yes, good luck with changing the status quo.


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