BULGARIAN PROPERTY MARKET

Bulgaria is gaining in popularity with investors and people looking for holiday homes. The combination of excellent locations; low prices; imminent EU membership and relatively short flight times has seen people view Bulgaria as worthy of consideration.

The Bulgarian Real Estate Association has published a quarterly index since 2002 and the results speak for themselves. The chart is published below and it is interesting to note the average increase in Bulgaria in 2004 was 24% and already in the first half of 2005 the increase is a very healthy 14%.



WHERE TO INVEST

The location you invest in will depend to a large extent to the purpose you plan for your property. It is pure investment or a combination of holiday and investment? Do you prefer sun, ski or city? All are possible in the country of Bulgaria.
As you can see from the chart the cost per sq. meter can very greatly.

For beach resorts look to Sunny Beach and Sozopol currently with places like Biala, Chern-morets and Dyuni starting to see developments.
For ski resorts look to Bansko, Pamporovo and Borovets.

Sofia, as the capital of the country, is attracting attention, similar to the way Budapest and Prague atraced investors in the 90's. The good areas to invest in Sofia can be difficult to find and clients can find themselves with a beautiful apartment but in an area that is very short of basic services and where building will continue for the next 10 years. Look to the main areas of City Centre, Boyana and Lozenets for the top of the market with developments along Bulgaria Boulevard and Reduta area for the mid-range. The cheaper areas of Student City, Reduta, Madlost could also be considered all be it for longer term capital appreciation with only low rental income today. Remember, Sofia population has doubled in the past 10 years and unemployment rate in the city is only 3%. Vitosha Mountain is to be developed as an International Ski Resort with AKB Fores to invest 30m Euro to modernize the ski facilities. Buyinbulgaria will have an excellent development launching in December in the up market Boyana district of Sofia. Next to Presidential Residence and ski lifts, it is only 10 minute drive to city centre.

In the future look to the (as yet) untapped rural tourism market and also look to the area of developments around Spa towns. Bulgaria is a beautiful country and you will begin to see developments in these market segments shortly. Sandanski is a beautiful spa town with hot springs and world recognized for it's mild climate and recuperative effects for people with bronchial problems. Lovely 2 bed apartments for sale in new development in the town for 104K Euro with 10 year rental guarantee of 5100 Euro/annum minimum and expected rental income of 7500 Euro net. Sandanski is only 30Km from the Greek border and only a 40 minute drive from Bansko Ski resort

Bulgaria is set to become golfer's paradise thanks to the climate and golf developments are starting to appear. Look to the wonderful Nicklaus designed golf course only 10 min-utes from Borovets ski with initial 3 bedroom villas for 124K Euro.

The Bulgarian Government is committed to improving access to the country. It has already promised an open skies policy from 2007 and will invest 120m Euro in the two Black Sea airports of Varna and Bourgas.

It is interesting to note that the main driver for property price growth is the opening up of the banking market to mortgages over the past two years. This lending to buy homes is very new in Bulgaria and is set be one of the main market drivers in the years to come. This is largely Bulgarians borrowing to buy their own homes. It shows the market is not dependent on foreign investment as a price driver but, rather is sustainable by the Bulgarians themselves purchasing in the market. Borrowing for mortgages as percentage of GDP is 40-45% in the EU, as an average, and is currently in single digit numbers in Bulgaria. The market has a long way to go before it even gets to half of the EU average. This will support the market and see sustained increases in property prices over the coming years. Remember, Bulgarian property prices are approx 50% of Prague and Budapest and

With EU entry imminent, mortgages now available locally, and top quality developments on the market, all within 3 hour flight time from Dublin it is certain that Bulgaria will be very interesting investment opportunity for many years.

Bulgaria lies in the north-eastern part of the Balkan Peninsula. The country is 520 km long and 330 km wide. It borders the Black Sea and the Danube River and is at a convenient and strategic crossroad location between Europe and Asia.

Population

8 million people

Language

Bulgarian

Capital city

The capital city of Bulgaria is Sofia with 1.3m people. Other main cities include Burgas, Varna and Plovdiv. Main airports can be found in Sofia, Varna and Burgas.

Alphabet

Cyrillic

Economy

Bulgaria has a Stable political and economic environment with liberal foreign investment laws. The currency is pegged to the Euro and Bulgaria plans to join the EMU by 2010.

Unemployment Rate : 10%. (3% in Sofia)
GDP Growth of 5-6%
Full Member of NATO
EU Membership in 2007
Corporation Tax: 15%
Capital Gains Tax: 15%
VAT: 20%

Principal Beach Resorts
Sunny Beach
Sozopol
Golden Sands

Principal Ski Resports
Borovets
Bansko
Pamporovo

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