Bulgarian property market |
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The Bulgarian economy is growing with fast rates since the beginning of 2000. Property prices in Bulgaria's regional centers have increased 2 to 3 times over the last four years. Such high levels of growth are unprecedented in normal market situations. Typically, a property value can double within the timeframe of 9-10 years. This takes into account both cycles of growth and decline. For the Bulgarian property market the increase is up to 200% in only a 4 year period, which shows an increasing confidence in the country's prospects. In September 2002 a sales index for real estates on the Bulgarian market (REMI) was introduced. Bulgaria is the first country in the Central and Eastern Europe to introduce such national index for real estate sector. It is considered to be a solid indicator of property investment activity and development. Starting from 100 points in September 2002 the REMI index has reached 174.4 points in July 2005.
The UK newsletter Property Secrets:
The prices of the properties increased with 18.2% in 2003 for the whole Bulgarian market. This rise for 2004 reached 30.9%. At the beginning of 2004 the Bulgarian property market was already a hot investment opportunity although many foreigners showed great reluctance to invest in an emerging market. The main factors that contribute to the advance of the Bulgarian real estate market are the stable political situation, the improvement of the infrastructure, the increasing popularity of Bulgarian sea and ski resorts, the low cost of living and the influx of foreign investment. The high growth in the market continues after Bulgaria’s accession in the EU in 2007. Bulgaria is now experiencing an influx of investment from the EU countries in the tourism sector and in the infrastructural projects and property prices are rising accordingly.
“Bulgaria currently offers investors the opportunity to buy properties at some of the lowest prices in Europe, close to beautiful beaches or ski resorts, and benefits from the dual attractions of marvelous weather and a very low cost of living.” The demand for properties on the Bulgaria’s real estate market has led to the development of many new constructions at the places of interest. The construction services and other real estate related services as selling and buying, maintenance, managing and security are constantly developing and have reached a good quality necessary for foreign investments. Reforms in the banking sector, better credit conditions and the law for foreign investments allowing property purchase by foreigners resulted in increased demand for real estates on the Bulgarian property market. During 2004 and 2005 the demand for properties in Bulgarian hot spots grew higher than the supply, which made the real estate investments very attractive for their fast return of investment and liquidity. Despite the intense construction work in the hot locations, the properties offered still don’t meet the growing demand. There are also factors that draw back the foreign investment, as the quality of some constructions and the lack of transparency on the property market. To recapitulate, the emerging property market in Bulgaria experiences an intense growth because of the active economy and the strong foreign investments influx. The figures show an increase in the property prices of 20-30% per year and the predictions are that this trend will be kept. Still the prices are relatively cheap, as the cost of living in Bulgaria is lower than in the Western European states. The real estate related services and bank services, including mortgages conditions, are constantly improving in order to meet the high criteria of the EU countries. The demand for properties in Bulgaria is high and stimulates the construction of new residential complexes and commercial buildings. |
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