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Is
Bulgaria Still on the Investor’s Radar?
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Bulgaria’s
property market continues to appreciate overall as residential prices
in Bulgaria’s 28 biggest cities showed an average 5.4% growth in the second
quarter of this year, according to the country’s National Statistics Institute
(NSI). Year-on-year, prices rose by 27% with the average price for a property
in Bulgaria now standing at BGN1,041.1 per sqm.
The NSI reported
that the popular tourist city of Varna is still the country’s most expensive
area, with prices rising by 3.9% in the second quarter of this year to
1,710.3 per sqm. Sofia also experienced moderate growth (3.8%) where the
average cost of a residential property is now 1,647.8 per sqm. The town
of Vidin, situated on the banks of the Danube - 200km north west of Sofia,
recorded the highest rise in property prices (23%) and now sits at 739
per sqm.
Bulgaria’s
second biggest city, Plovdiv (5%), the Black Sea port of Burgas (4.1%)
and the Danube town of Russe (10,9%) all experienced growth recording prices
of 1,103.2, 1,366.7 and 1,182.7 per sqm respectively.
The only town
where no growth was recorded is Targovishte - where prices haven’t changed
since 2006.
Related
News
The Pari Daily
newspaper reports that there is more than enough property for sale in Bansko,
but interest in buying there is slowing fast. The newspaper also said that
the property market in the ski resort has stagnated since the beginning
of 2007, with millions of Euros worth of investment being blocked.
It has also
been reported that estate agents have been closing their doors as prices
drop to between €500 - €900 per sqm. The nearby town of Razlog
has also been feeling the affect, with agricultural land near a famous
golf club being offered at €20 - €50 per sqm – with no takers.
Pari
also reported that the number of construction permits issued in Bansko
has decreased for the first time in the last two years with some investors,
who already hold permits, not starting to build (although a moratorium
on new building permits in the area was introduced in January).
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Property
is the fastest growing asset in Bulgaria. With its accesstion in the
European Union the country presents a prime opportunity for investments
with very promising growth potentials.
Investing
in Bulgarian real estate now means simply following the logic of the real
estate trends in Europe in the past 20 years. For example, Bulgaria today
is what Spain was two decades ago with regard to real estate development
and growth, boom in tourism, and general economic advancement.
Bulgaria
is particularly attractive because of its diverse and striking natural
terrain-the beauty compacted into such a tiny country hasn’t stopped to
fascinate visitors and investors alike. Relatively low urbanization and
a good climate, combined with the rich cultural heritage, numerous historic
and natural attractions, and friendly local environment have made Bulgaria
a desired place for a second home or a permanent residence.
In the last
18 months property prices in Bulgaria increased more than 25% and in certain
cases real estate value increased by 50%. Now, after this initial big jump,
the real estate market has taken a slower but steady trend of going upward.
Prices of property and land are expected to increase by an average of 10
to 15 percent for the next few years and experts agree that now is good
time to catch the wave of the growing real estate market in this country.
Whether investing
in real estate development or buying land, or acquiring a vacation property,
Bulgaria is a market that should not be overlooked. The prime real estate
areas are obviously the bigger beach resorts along the Black Sea coast
like(Albena, Golden Sands, St Konstantin and Elena, Sunny Beach); the coastal
city of Varna; the country’s capital Sofia; the mountain resorts of Pamporovo,
Bansko and Borovets; and the numerous towns and villages close to the sea
coast. At the same time the Bulgarian inland, with its authentic towns,
bucolic villages, and landscape, unspoiled by industrialization is a long-forgotten
site for many West Europeans and also an attractive option for investment
in real estate.
Low cost
of living, great food and services, developed infrastructure, spectacular
scenery, and easy accessibility from Europe due to the expanding network
of airline charters, have made Bulgaria not only a desired vacation spot
but a place for sound investment.
Bulgaria is
an up-and-coming country, both in general economic terms and as a tourist
destination. Natural attributes such as a warm Mediterranean climate, beautiful
coastline, winter sport resorts and picturesque scenery form the basis
for its growing popularity and future potential as one of Europe’s leading
destinations, but what makes Bulgaria especially interesting – to investors
and homebuyers a like – is the fact that it offers such great value
and investment opportunities.
Bulgaria can
in many ways be compared to Mediterranean destinations such as Spain, Greece
and Portugal, yet it is still in the early phases of development and its
property prices are therefore still only about a quarter of what you would
expect to pay in a country like Spain. This makes Bulgaria a very attractive
option for those people who are looking to buy an affordable holiday home
or a property to rent out. |
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| It takes more
than low prices to make a good investment, but coupled with excellent growth
potential of the Bulgarian Black Sea coast and ski resorts, this area
offers ideal conditions for optimal returns on investment.
The attributes
already mentioned, accompanied by over development and crowding in some
parts of the Mediterranean, ensure that the demand for Bulgarian tourism
and real estate will continue to grow well into the future.
Given this
huge potential, and the current rate of growth, it is likely that property
prices will continue to rise until reaching a par with established markets
such as Spain and Portugal. The process, however, will take quite a few
years, and it is during this period that Bulgaria will provide one of the
best investment climates in Europe.
Worries about
the economical and political stability of the country have subsided, as
over the past years Bulgaria has been making the transition to a stable
democracy where fiscal and economic conditions continue to improve year
on year.
Economic growth
rates are in excess of 4% per annum, inflation and unemployment have dropped
to 3, 5% and 12% respectively and the currency has been stable since being
pegged to the Euro.
Both the volume
traded on the SOFIX Stock Exchange and loans and mortgages issued by Bulgarian
banks are growing rapidly, while the number of airlines offering easy connections
from major European centres has been growing apace with tourist visits.
The indicators
are therefore excellent, as the country – already a member of NATO and
joined the European Union in January 2007, a fact which in itself will
have a strong upward effect on both demand and prices of Bulgarian real
estate.
Whether looking
to invest as a private individuals, as a syndicate group or as an institution,
Coral
Estates has the experience and market knowledge to offer sound advice,
find attractive investment opportunities and help guide the process in
a way that is safe, efficient and profitable.
Thanks to our
specialist in-house promotional and sales team, as well as our working
relationship with the leading construction firms, we also advise foreign
developers, helping them find the best land sites and projects to invest
in, and ensuring that projects are completed on time and within budget.
We can also co-ordinate the marketing and end-sale, realising a fast, profitable
and efficient exit route. |
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