Property News for Bulgaria
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Bulgaria’s Property Market Could Go Either Way
In Spain you have properties that are being slashed in price, in the UK you have a real estate market that is stagnating, in Northern Cyprus you have a market that has stagnated for so long that it is actually doing quite well thanks to its genuine bargain status, and then you have Bulgaria’s property market that could go either way – i.e., up or down.
There are robust fundamentals supporting a residential and commercial property market that bode well for long-term strength in Bulgaria – but there are also some serious and significant flaws in Bulgaria’s property market that could undermine it catastrophically and for the long-term. Here’s what we think…
Wise Words for the Bulgarian Property Economy’s Future
We’re tired, oh so tired of it all already – all the talk of an untenable global credit situation, all the talk of house prices crashing and consumer confidence failing. But I suppose we’d better get used to it as nothing is going to change for a good few months yet! The new jazzy tabloid style reporting that even the great BBC seems to have adopted will whine on about it all for months and months and yet, you know what, it’s not all doom and gloom for the globe’s property markets!
In this article we’d like to impart some wise words for the future of the Bulgarian property economy. A property economy that many might think will be one of the first to fail as British and Irish investor interest ebbs away.
Uncertain Times for Bulgarian Property Investment
A great weight of data has been released relating to the Bulgarian economy recently and it has been being analysed by financial experts; the resultant data coupled with opinion leaves quite a confusing picture in the minds of many would-be property investors about whether now is an uncertain time to commit to the property market in Bulgaria or not. There are those who are staunchly defending the robustness of the economy, those who are claiming overseas investors are backing away from Bulgaria and then there appears to be a fiscal landscape that could go either way.
We’ve been attempting to sift the facts from the opinions to present a clearer picture to you of what’s going on in Bulgaria - and to be honest, we see uncertain times ahead for Bulgarian property investment.
Office and Residential Property in Bulgaria
The Bulgarian property market began to come alive a couple of years prior to the nation’s 2007 EU accession and has quickly moved from emerging hotspot where massive property fortunes could be won, (or lost!), to a mature market where there are factors and fundamentals supporting it - but also realistic levels of supply and demand that restrict pricing expansion.
As a result of these facts, gone are the days of tiny property prices and huge Bulgarian real estate gains – at least according to Deyan Kavrukov, the head of an equity fund investing in the region. But contrasting his opinion is word from a British based property agency that states that office and residential property in Bulgaria’s capital city of Sofia remains very much in demand and highly profitable.
Construction and Property in Bulgaria are Booming
Both the construction industry and the property market in Bulgaria are continuing to boom as we move in to 2008, with 2007 having been bumper years for both economic sectors according to a series of independent reports. This is excellent news for the nation and for all those who had committed to the market prior to the country’s 2007 EU entry...but what does the market have in store for the short to medium term for those who have yet to buy?
Well, there is an opinion widely shared that the construction industry will continue to expand well in to 2010 simply because of a general dearth in supply of quality residential, retail and some industrial commercial stock across the nation...so this will bring with it undoubted opportunity. But what about basic buy to let strategies or buying now and reselling a few years down the line for realisation of equity expansion? Well, neither investment strategy will bring much success in the short term in our opinion…
Ways to Invest in Property in Bulgaria
Despite the fact that Bulgaria joined the European Union on the 1st of January 2007, its laws and legislation relating to the purchase of immovable property are not yet in line with the EU norm and buyers will actually have to wait until 2014 before they can directly purchase freehold title to any piece of land or landed real estate in Bulgaria.
As it stands at the moment the buying process in Bulgaria flags up two potential purchase methods for buyers – they can either establish a local limited company and purchase their land and property through the company and thus obtain freehold rights to the property – or they can forego their right to own the land outright and either purchase a simple apartment or buy limited rights to the land such as ‘leasehold’ equivalent or construction rights.
New Emerging Investment Property Hotspots in Bulgaria
So much has been written and said about the current prospects for the investment property market in Bulgaria now that the nation has joined the European Union; opinion ranges from those who believe the hike in property prices prior to EU accession represented the majority of the positive adjustment due in Bulgaria, to those who are certain that property prices could now mirror those of other recent EU entrants where prices doubled following accession.
In this report we want to step away from this argument as we have already explored in it in earlier reports - instead we would like to present three new emerging investment property hotspots in Bulgaria where we believe there is still room for significant price expansion and where we are quite convinced future investors will be looking in order to achieve straightforward property price growth as well as strong ROI.
EU Accession and the Property Markets in Romania and Bulgaria
On the first of January 2007 Bulgaria and Romania joined the European Union; their membership has finally brought to an end the years of speculation about whether or not the nations meet the strict criteria for entry. So what effect will EU accession have on the property markets in Romania and Bulgaria?
In this article we review the property markets in both countries prior to EU accession and examine what the future likely holds for the real estate economies in these, the two newest EU member states.
Future Profit Potential for Property in Bulgaria in 2007
There comes a time in any emerging property market’s period of transition when it stops emerging and it actually arrives, and 2007 could very well be the year when Bulgaria’s property market arrives. The future profit potential for property in Bulgaria in 2007 will be aided greatly by the fact that the country will become a member of the European Union on the 1st of January and between 2007 and around 2010 the property market in this Eastern European country will most certainly remain hot.
Some have said that prior to accession all of the profits have been drained from the market, that greed and speculation have damaged the long term attraction of Bulgaria for its required international tourism and retiree market and that actually Bulgarian property was a flash in the pan as an investment commodity – this article will prove that to be a false series of assumptions. Bulgaria will return profitability in 2007.
Bulgaria’s Property Market Success is Sustainable
There is irrefutable proof that the Bulgarian authorities respect the amount of revenue that their nation has generated from overseas investment into property to date because they are committed to doing all they can to maintain, develop, enhance and promote tourism - on the back of which the majority of speculative property investment has so far been made.
In our opinion this means that Bulgaria’s property market success is sustainable for the long term if investors make smart and informed decisions based on research into which areas of the country are most in demand from tourists, which areas are being invested into and increasing in popularity, and which pockets of Bulgaria are likely to emerge as favourites with both the more affluent holiday maker and the international retiree or expatriate seeking a new permanent home. This article presents an example to support the current Amberlamb opinion.
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