We haven’t featured any Bulgarian off-plan projects for a while so a return to this current favourite property hotspot is in order. A recent announcement stated that the expected ROI in the Bulgarian property market had increased 21%, in the four months from the start of 2006. This can be attributed in part to low interest rates which have dropped to some 5.95% down from 7% and reduced initial deposits. Bulgaria’s appeal as a whole continues to receive positive media with the current Assetz quarterly Property Investment Tracker
placing Bulgaria at the top of its hotspots chart.
Bulgaria should offer strong long term prospects with sustained growth in tourism, over 4.8m tourists are expected in 2006 and tourism now accounts for 16% of Bulgaria’s GDP. In addition, improved business prospects created by Bulgaria’s expected EU entry in January 2007 or 2008 will offer future economic growth potential. The Bulgarian News Network has further reiterated this by reporting that both Bulgaria and Romania expect to adopt the Euro ahead of Hungary despite it having joined the EU back in 2004. The adoption of a single currency is a very positive step especially on a property investment front as it helps to remove currency rate fluctuations which have been a red flag to certain investors thinking about putting their money into Bulgaria.Series of events keeps Bulgaria high on the overseas property radar
1) A recent report from the Sofia News Agency
outlines a notable increase in flight routes to and from Europe. New low cost flight routes continue to launch with Air Bg announcing new routes between Sofia-Alicante, Varna-Milan and Burgas-Dublin/Madrid making the much talked about coastal resorts more accessible to visitors. Both Varna (Black Sea Capital) and Bourgas airports look set to expand and improve over the next 2 years almost certainly resulting in a direct increase in airport passenger traffic.
Low costs flights are currently operated by Wizz Air
, and Bulgaria’s very own Hemus Air
and Air BG
. The rest of Europe is also covered by Norwegian.no
& Condor Air
. Interestingly, neither Ryanair nor Easyjet fly to Bulgaria.
2) In addition to coastal tourism, Bulgarian remains keen to attract increased foreign investment in its capital city Sofia. Both residential and commercial property is worth keeping an eye on, as improvements in building regulations are approved prompting more high rise new builds taking place. Buy-to-let apartments are still a good bet as skilled workers migrate to Sofia in search if work and as blue chip workers locate offices down town. Infrastructure upgrades will continue to increase transport links into and out of Sofia to surrounding towns and villages but also neighbouring countries.
3) The World Bank has agreed to loan Bulgaria
240 million euros a year until 2009 to help it to boost its presence as our tourist and investment hotspot.
The debate still rages as to where is best to invest in Bulgaria. As we note time and again, research is key
and in choosing your Bulgarian property investment perform the basic rule of thumb which may people fail to do so when buying off-plan. Do you think that you would pay a price premium to buy your chosen property once complete? Does it fit the bill in terms of superior location over other local developments in competition, build quality, onsite facilities and if possible future management provisions for rental or maintenance. Think about who will buy your property, is the market looking for studios or 3 bedroom townhouses?
There are those that say the coastal resorts of Sunny Beach and the Ski resort of Bansko
are reaching saturation, with talk of overbuilding and price corrections looming. However there is the belief that buying well within these markets i.e. upmarket or in an untouched location close to these resorts there is still money to be made as development inevitably moves – buying the right property is the key to good investment. Take the case of Spain’s Costa del Sol where development has moved from Marbella along the coast right down as far as Gibraltar