Bulgaria’s residential property market is nearing its peak - realtors say

Mon 21 Jul 2008 - Svetlana Guineva

For the months of May and June, supply on the residential property market surpassed the demand by 50 per cent, Katya Tsenova, the executive director of Address real estate agency, told a news conference on July 21.

In an attempt to evaluate the current status of the market, there were a number of contradictory statistics made public by various agencies in the past several weeks, Tsenova said.

As being one of the leading consultants and somewhat of a price negotiator, Address determined that Bulgaria’s residential property market is falling into a state of self-correction. Tsenova explained the tendency as a situation when potential buyers become more particular in their wishes and refuse to pay the proposed high prices. This compels sellers to correct the demanded prices and lower them enough to make them more appealing, the executive director said.

Rising inflation and the higher interest rates charged by banks since the end of 2007 have contributed to the property price hike, Tsenova said. According to Address real estate, for the first six months of the year, the average increase of residential property in the bigger cities comes to 17 per cent.

A record high price jump has been observed in Rousse, Plovdiv and Veliko Turnovo, almost by 27 per cent in all three cities. Sofia comes fourth with an increase by 21 per cent. The lowest increase has been determined in Sliven and Sandanski, by four per cent, and Stara Zagora by six per cent.

Tsenova explained that the residential market in Rousse is booming as a result of the city’s economic growth, and the interest displayed by buyers from neighbouring Romania.

The average price a square metre in Sofia is 1094 euro, in Varna it is 1031, while the cheapest property in a relatively big town such as Yambol is 402 euro a square metre, the agency said. The accumulative data has been drawn upon actual deals made between January and June 2008, Tsenova said.

Tsenova said that the need for price corrections is evident in some of Sofia’s boroughs such as Mladost, where prices have gone up by 25 per cent for the first six months, Studentski Grad (up by 23 per cent) and Lyulin (up by 21 per cent). In those areas the supply is somewhat relevant to the demand, but buyers are not so impulsive in their decisions, they take the time to do several inspections of the property and are more cautious in their selection, Tsenova said.

Asked whether the recently-imposed construction prohibition in Sofia’s borough of Mladost, which will be in effect for six months, will affect property prices in the area, Tsenova said that Mladost was a quite desirable location. Six months would not be enough to measure significant repercussion on the property prices, she said.

She said that two factors showed that Bulgaria’s residential property market was near its peak moment. One was the decrease of the number of flats bought solely for their investment value and the the second factor was the increase of newly-built completed flats put up for sale. Yet another tendency was beginning to take shape, Tsenova said. The majority of buyers are looking to buy residential property, which would serve their family needs rather to buy for future profitability.

“Let us not forget that investing in real estate still remains the best investment. Property that could not find a buyer is virtually non-existent,” Tsenova said.

Bulgaria top budget destination in the world

dailymail.co.uk, 09 March 2008

When the credit cards bills roll in after a holiday the shock can be enough to leave you needing another break.

There may be a solution .. . and it's called Bulgaria.

When holiday destinations were assessed for weather, cost and quality of accommodation and price of food and drink the east European destination came out as the overall best value option.

A pint of beer in the country, which has fine beaches along its Black Sea coast, costs 49p on average.

A three-star hotel double room with breakfast averages £45-a-night, a three-course meal £7, a Big Mac £1 and a short taxi ride £1.45.

In second place was Morocco which, with only four days of rain a month, is particularly appealing to sun lovers.

Travellers heading for Marrakech and other resorts can expect to pay 51p a pint, £50-a-night for an equivalent hotel room, £10.50 for a meal, £1.48 for a burger and £2.80 for a cab.

Tunisia, which offers beach holidays and desert adventures, came third with Egypt fourth, the Czech Republic fifth and India sixth.

By comparison, tourists will pay for the privilege of sticking to favourites such as the Costa del Sol, the South of France or the Italian Riviera.

Spain may be the most visited destination but it came a lowly 17th in the value league commissioned by Teletext Holidays. A pint in Spain averages £1.56, the hotel room £80, meal £17.50, hamburger £2.25 and taxi £6.50.

France is the second most popular country, according to the Association of British Travel Agents' figures, and Italy the fifth. But both are more expensive than Spain.

A pint is £3.55 in France and £3.02 in Spain while the hotel rooms cost £100 and £95 and the meal £18.50 and £35 respectively. The burger is £2.25 in each country and the cab fare is £7.80 and £4.86 respectively.

Researchers found Bulgaria to have the cheapest pint, the Czech Republic the cheapest three-course meal at £6 and Egypt the best value Big Mac at 65p. The least expensive hotel rooms were in the Caribbean at £25.

Ash Makkar of Teletext Holidays said: "Interest in countries such as Morocco and India has grown significantly, proving people are becoming more adventurous when it comes to booking a trip abroad."

Balkan housing market booms, corporates lag

Wed 5 Mar, 2008
BELGRADE (Reuters) – Residential real estate is booming in the Balkans as the region recovers from the wars and stagnation of the 1990s, but big corporate investment will only come with real political stability, a top sector executive said.

“Over the last 15 years there hasn’t been sufficient investment in residential stock,” Rob Schweizer, Merrill Lynch’s director of Global Principal Investment told Reuters in an interview on the sidelines of a real estate conference in the Serbian capital Belgrade.

“We are optimistic the region is going to continue to enjoy significant growth and really outperform compared to the rest of Central Europe.”

Construction ground to a halt in the region - the former Yugoslav states and Albania - for most of the 1990s as a result of conflict, embargoes and economic tightness.

As politics stabilised and investment inflows created jobs and jump-started national economies to GDP growth rates of over 5 pct, high housing demand and low supply, especially in urban centres, meant prices also started booming.

Residential property in Balkan capitals can currently cost up to 4,000 euros per square meter in Belgrade, 3,000 euros in Croatia’s Zagreb, 2,000 euros in Sarajevo in Bosnia, and some 1,500 euros in Albania’s Tirana.

But prices for land and commercial property are still lagging, reflecting the lack of big-name foreign developers, who Schweizer says are looking at the bigger political picture.

“The main obstacle that every foreign investor will cite when you talk about the Balkans is political instability,” he said. “With the Kosovo situation…the political stability will become issue number one for every investor.”

Serbia’s breakaway southern province declared independence last month, triggering sometime-violent protests in Serbia and other countries with ethnic Serb minorities, and reviving the image of the region as a volatile, lawless place.

Schweizer said Merrill Lynch was nevertheless sticking to its partnerships with local companies and had clinched deals to build shopping centres in Belgrade, Sarajevo, Zagreb and Skopje.

“Our strategy is to become the dominant city centre retail shopping developer,” Schweizer said. “In the capital centres you see the wealth effect spill over.”

Schweizer said Serbia, the biggest country in the region, had a lot of potential, but investors would wait to see how politics played out, especially regarding European Union membership.

Belgrade has initialled a first-level agreement on closer ties with bloc, but Brussels says it cannot formally sign until it delivers remaining ethnic Serb war crimes suspects from the wars of the 1990s to the United Nations tribunal in The Hague.

Nationalist Prime Minister Vojislav Kostunica opposes ties with the EU because of its backing for Kosovo’s independence.

“Romania and Bulgaria have so far been the region’s winners in attracting the foreign investment,” Schweizer said. “People perceive that being in the European Union gives them political stability.”

Serbian analysts say that the $880 million foreign direct investment the local commercial real estate market attracted in 2006 and 2007 is but a fraction of its real potential.

“Serbia clearly has traditionally been the economic hub of the region, but obviously because of the political situation has seen more direct investment going to some of the neighbouring countries as opposed to directly into Serbia.”

World Superstars Boost Sofia Property Prices

13 February 2008

By British real estate consultant Obelisk

Obelisk says Sofia property investments are attracting the attention of Hollywood celebrities and pop icons, prompting the emergence of a new luxury market.

Cheap holidays, cheap skiing, cheap flights, cheap food and drink, and of course cheap property - ‘Cheap' has been the main attraction for British investors buying into Bulgaria.

However, big changes are in the air with an increasing number of foreign investors and Hollywood A-listers buying up the more exclusive high-end property.

Antonio Banderas, who already owns property in Spain, is amongst "Hollywood royalty" spending many months in the capital filming The Code, due for release this year, along with Morgan Freeman who has revealed his interest in purchasing a block of executive apartments in Sofia.

The newly renovated film studio in Sofia has created a house-hunting frenzy from top filmmakers and celebrities. Nu Image has strategically snapped up the previously state-run film studio in Sofia for US$9.2 million in a bid to cut massive production costs that the company faces in the US.

Rock legend Lenny Kravitz has also put Sofia firmly on the superstar map. The "Get on the Bus with the Love Revolution" tour will descend on Sofia's Akademik Stadium on 27th July 2008. Huge interest for the £15 tickets has been created, with international fans taking advantage of a cut-price city break. Pink is also due to hit the city in July along with Marilyn Manson, Michael Bolton, and Vanessa Mae.

Sofia is home to the majority of the country's 200,000 millionaires with many ready to pay over €3,000 per sq. m. for a city centre complex. The rich list is prepared to buy an entire floor for 2000 sq. m of complete exclusivity with the added bonus of a specially commissioned ramp for sports cars such as Ferrari and Lamborghini in the underground car park.

Overseas property writer, Zoe Dare Hall, suggests that British property investors, who make up 67% of all foreign buyers in Bulgaria, are missing out on hugely bullish Sofia property investments.

The need for larger, more luxurious properties in prime city, beach and ski locations dictates the market evolution. Additionally, rising demand is originating from foreigners working for the big multinationals in Sofia and from Bulgaria's emerging middle to high classes, for properties within commuting distance of the capital.

James Gonzalez, Market Analyst at Obelisk comments, "Luxury properties are still within an affordable range for many overseas buyers, compared with more traditional markets (such as Spain or Portugal). A luxury apartment in Sofia's commuter belt averages around £100,000 - you would be hard pressed to find a good apartment in the Costa del Sol for that price."

The growing demand for top-end properties is prompting developers to raise the quality levels of new properties, with a number of developments now offering well-executed design and superior build qualities. Generally, property prices have remained very competitive.

Sofia is an excellent commuter base with budget airlines, such as Wizz air, servicing routes all across Europe. The airline will also be offering internal flights to the town of Kavarna - known as the ‘Rock Capital of the Balkans', with headline acts such as Motorhead, Led Zeppelin's front man Robert Plant and musicians from Black Sabbath, all kicking off the Kaliakra Rock Fest in July.

The country is also upgrading ski facilities including a £345 million Super Borovets project - a major development in the country's most popular ski resort. Spa tourism is also on the up and steering the market further towards the more upmarket investors and holidaymakers.

"Since Bulgaria's EU accession foreign buyers' confidence in the country has grown immensely. British buyers, who still believe Bulgaria to be a destination for low end investment rather than a second home or luxury rental investment, need to revisit the market."

"With the rising demand and the low supply of quality new builds, British overseas property investors need to look at why the rest of Europe views Bulgaria, and in particular Sofia property investment, so differently."

Obelisk strongly recommends that investors should do their research before embarking on an overseas property purchase.

Choosing the Right Real Estate Investing Strategies in a Down Market

Sub-Prime Mortgages and Down Markets Make it Imperative that Real Estate Investors Choose the Right Strategy to Make Money.

Charlotte, NC, January 31, 2008 --(PR.com)-- According to Judson and Lynn Voss, Hosts of Get Real, The Real Estate Investing Show for the Rest of Us, markets like ours are the best time to make money for the long term in real estate. They believe that strategies that might have worked 12 months ago could be tougher today. “The sub-prime fall-out, the concern about a possible recession and record foreclosures are basically the perfect storm for anyone interested in real estate investing to get educated the right way and choose a real estate investment strategy that is right for them.”, according to Judson Voss. Read the article...

17  January 2008

A PLACE IN THE SUN REVEALS THE UK’S TOP 20 DESTINATIONS FOR BUYING ABROAD

According to a survey published today (17 Jan), in the form of A Place in the Sun magazine’s annual Top 20 buying destinations, despite a raft of emerging markets and USA property prices down 30% on a year ago and a dollar weakened by 25%, it’s the traditional sun-seeker’s favourite Spain that takes the number one spot for the second year running.

The poll, conducted at the recent A Place in the Sun Live exhibition at the NEC Birmingham, the world’s largest overseas property event of its type, also saw France with its enviable lifestyle maintaining its 2006 second place and Turkey climbing into third position on the back of a wide range of developments marketing in the UK offering great value and year-round sunshine.

Other key trends highlighted include the USA’s leaping six places into fourth position as UK investors take advantage of a buyer’s market and two dollars to the pound, Italy moves up three spots into the top five (as Calabria becomes ever more prominent) and the meteoric rise of Canada – the biggest climber – up seven places to number nine.

Seven of the top ten destinations are European, with Cyprus (6) and Greece (7) performing consistently on the wish lists of UK residents looking for a home abroad, but Egypt is up three places and bubbling under (at 11) and threatening to break through alongside its North African counterpart Cape Verde (10).

Another interesting mover is Australia, which jumps from 20 to 15 as more UK residents than ever make a permanent move overseas (389,000 last year according to the Office of National Statistics) – as witnessed by the success of The Emigration Show at A Place in the Sun Live.

Says Richard Way, Editor of A Place in the Sun magazine: “What’s really interesting about our annual Top 20 survey is that it shows UK buyers as traditional in one respect – in favouring Spain and France – but also willing to seek out new hot spots and investment opportunities elsewhere: across Europe, North Africa, North America, Asia and the Middle East. When looking for a second home or a new life in the sun it seems that Spain’s mix of great weather, rich culture and beautiful coastline is keeping the country at the number one spot, but buyers aren’t afraid to consider Germany, Montenegro, Morocco, Las Vegas, Thailand or Dubai.”

The UK’s Top 20 overseas property destinations according to A Place in the Sun:

Bulgaria Named World's Strongest House Price Riser

6 January 2008, (article from novinite.bg)

Bulgaria saw the world's strongest house price growth at 30.6% (15.4% in real terms) to end-Q3 2007 from a year earlier, says the Global Property Guide (GPG).
Yet another research has pointed Bulgaria as the country with the world's strongest house price growth last year amidst a global cooling of the property market.

The study carried out by Global Property Guide (GPG) said Bulgaria saw the world's strongest house price growth at 30.6% (15.4% in real terms) to end-Q3 2007 from a year earlier.

Shanghai came in second, despite efforts by the Beijing government to cool the market. House prices there rose by 27,85 percent in 2007.

The survey, which provides information for potential property investors, says that while the housing market gained momentum in the Asia-Pacific region, it slowed in Europe and "crashed" in the US.

In Europe most countries registered unimpressive y-o-y house price changes in 2007, aside from Norway and Estonia, the survey shows.

Ireland's house price plunge continued, with a 4.68% y-o-y drop to October 2007. When adjusted for inflation, the drop is more pronounced at 9.1%. The Irish housing market is vulnerable to interest rate changes, as 85% of mortgages are variable rate, GPG comments.

The Baltics performed quite well in terms of house price changes from a year earlier, but the latest quarterly data presents a picture of a region whose housing markets are in trouble.

In Latvia apartment prices have dropped by 7.7% to September 2007, over a quarter earlier. Lithuania's apartment prices have stagnated at LTL 12,500 (US$5,213 or €3,620) per sq. m. in the last two quarters. In Estonia quarterly house prices increased by 23.4% y-o-y to Q3 2007, lower than the 28.6% growth to end-2006.

Norway's housing markets are showing signs of nervousness, despite a strong performance this year. The house price index for the entire country increased 11.6% y-o-y to Q3 2007 (11.9% in real terms due to slight deflation). However, prices in the metropolitan area of Oslo-Baerum fell 0.5% from Q2 to Q3 2007.

Spain recorded 5.31% y-o-y house price growth to Q3 2007, the lowest rate of increase in nine years. Higher interest rates have dampened demand, and banks have become very careful in granting housing loans.

A slow down was also evident in the UK, though less sharp than expected. British house prices increased 9.7% y-o-y to Q3 2007, less than 2006's y-o-y increase of 10.5%. When adjusted for inflation, the house price increase in Q3 2007 was 7.5%, slightly higher than the 7.3% rise in 2006.

House prices in Italy and Greece have also cooled. Mortgages in these markets are predominantly based on variable interest rates.

Although mortgages in Denmark, France and Germany are mostly based on fixed interest rates, their housing markets have nevertheless cooled. Other European countries which experienced house price slow downs are Sweden, Poland, Finland, Netherlandsand Switzerland.

France has increased tax deductions on mortgage-loan interest rates, a measure expected to hold housing demand firm.

This is why many Bulgarian real estate agencies follow the rule: If you can't beat them, join them or benefit from them. In the past two years, a few wealthy Bulgarians started investing in holiday homes in Greece. So far, this is not a stable trend, but it is interesting to see why these Bulgarians, who could make an excellent investment in holiday properties in their own country, go for properties twice as expensive Greece.

The reasons are twofold. First, after Bulgaria joined the EU, it became much easier for Bulgarians to purchase properties in Greece, where the procedure for none-EU citizens is so difficult that it is almost impossible to obtain a state permit to buy real estate.

This fact alone was not enough to ignite active interest for Bulgarians in purchasing Greek holiday properties. But it was taken into account by some real estate agencies and other related companies, which initiated one of the most successful PR and advertising campaigns in the history of the real estate business in Bulgaria. And this is the reason behind the heightened interest.

The campaign conveyed three messages:
1. Prices for real estate properties are pretty much the same in both countries, but it is more prestigious and profitable to own a holiday home in Greece.
2. Greek sea resorts are cleaner and more ecologically friendly.
3. For Bulgarians who live in the western part of Bulgaria, it is much more convenient to travel to Greece than to the Bulgarian Black Sea resorts.

While the third argument is not unreasonable, the first and the second are simply not true.

Debunking the myths

Myth One: An old villa on the peaceful Greek coast is better then an apartment on Bulgaria's overdeveloped concrete seaside.
The companies that have been promoting the purchase of holiday homes in Greece to Bulgarians point out ecological issues as an argument. They say that, while the Bulgarian Black Sea coast has already turned into a concrete jungle, nature in Greece is still pristine. In fact, since 1936, Greece has lacked a comprehensive, synchronised policy of preserving important ecosystems, including the sea coast.

Overdeveloped resorts and violations---mainly building in strictly protected territories---of Natura 2000 rules that protect biodiversity in the EU are just as serious as they are in Bulgaria. What is more, since 2006 the Greek government has encouraged the building of several thousand holiday villages with the aim to engage in the active European market of summer holiday homes. The director of Greenpeace for Greece, Nikos Haralambidis, honestly confesses that these new sea resort projects need more careful assessment, since they will significantly increase the pollution of the coastal region.

As for sea pollution, the situation in Greece is even more serious. Because of severe industrial pollution, swimming is strictly prohibited at almost 30 per cent of beaches in Athens. The same holds true for Solon  ((QUERY - SHOULD THIS BE THESSALONIKI. CLS)), Patra, and many other mainstream resorts. Paul Misfood, co-ordinator of the United Nations Mediterranean Action Plan evaluates the quality of the coastal waters with five out of ten points. Of course, in upscale tourist destinations like Mikonos and Cycladic, island nature is still perfectly preserved. However, properties on the luxurious Greek islands are not offered or even advertised on the Bulgarian market.     

Myth Two: Prices for holiday properties in Greece are similar to those in Bulgaria, sometimes even lower.
The truth is that prices for summer holiday homes in Greece are about twice as high as those in Bulgaria. For example, if buyers wish to purchase a house in relatively good condition and in a comparable location, they will have to pay at least 2400 euro a sq m in Thasos and about 1200 euro in the new town of Nessebar.

Prices for a newly built, four-room villa in Halkidiki start from 400 000 euro and go up to 900 000 euro, in case one wishes to purchase a small private beach area together with the villa. Smaller villas of 50 to 80 built up square meters together with a yard can be purchased for 150 000 to 250 000 euro, but having in mind that Halkidiki is definitely not among the most luxurious locations, these prices are high for a holiday home.

When it comes to holiday apartments, in Bulgaria the most frequently advertised destinations are in the regions of Thasos and Kavala, the key phrase being "in the regions." Real estate agents promise apartment prices starting from 1400 euros per square meter there, but this does not mean one can buy a top-location holiday home on Thasos or Kavala. These prices are valid for small, isolated, and unknown villages like Iraklica, located somewhere in the region of Kavala.
 
In 2006, the average price for lower- to middle-class holiday homes in mass resorts was about 2400 euro a sq m in Greece and 1100 in Bulgaria. However, while prices for luxurious holiday homes in top Bulgarian resorts did not exceed 2100 euro a sq m in 2007, similar or comparable properties in Greece were sold for up to 4200 euro a sq m. 

All deal-related taxes are pretty much the same in both countries: the local tax is about two per cent out of the total amount of the deal, the notary tax one per cent and the lawyers fee about 500 euro.
    
Myth Three: the quality of holiday properties in Greece is much better than in Bulgaria.
In 2002, less than 3000 foreign nationals purchased a holiday home in Greece. That was partly due to the inactive state policy of promoting the country as an attractive real estate destination, partly due to the difficult and slow purchasing procedure, and partly because of the sometimes poor condition of the properties.

The problem is that the new resorts are still in the planning phase, and the buildings in the already existing ones are often too old, badly maintained, and in need of additional investments. The seismic particularities of the country require specific earthquake building precautions, and real estate agents joke that they sell houses with earthquake resilience certificates, but the certificates are more resilient than the houses themselves.  

Acknowledging the perks
Greece, however, has one serious advantage - the allowed building density is 10 per cent out of the general size of the plot, and in certain incidences up to 20 per cent. In Bulgaria, the same parameter starts from 25 per cent and reaches up to 40. The low building density gives a completely different face to the Greek sea resorts---one can rarely if ever see one of those concrete giants they call "hotels" in Bulgaria. 

Another important advantage is that Greece is a far more developed and popular tourist destination than Bulgaria. Seventeen million foreign tourists visited Greece in 2007 and provided eight per cent out of the total GDP of the country, compared to the about three million visitors to Bulgarian sea resorts. Consequently, rental demand is higher in Greece.    

Bulgaria, on the other hand, is a rapidly developing tourist destination with relatively low prices and excellent chances for five to seven per cent annual investment return from summer holiday homes.

Investors can decide for themselves about the location of their holiday home. Both countries have their own advantages as well as disadvantages, but if one chooses Greece and not Bulgaria, this decision will certainly not be based on price.

Summer resorts

14 Dec 2007 - Anelia Zaharieva (article)

Taken as a whole, summer resorts enjoyed a rise in sales, compared to 2006 when the market experienced stagnation, according to Bulgarian Properties CEO Mihail Chobanov.

This summer marked a five to 15 per cent hike in the prices of real estate at Black Sea resorts, despite wide-spread rumours of massive developer withdrawal. Coastal holiday home supply recorded 39 per cent growth which, in physical terms, amounts to 13 500 units, according to a Colliers' report.

Investors remained interested in gated compounds. Located on 30- to 100-decare plots, they feature their own infrastructure and all the amenities a gated community offers, such as swimming pools, childrens' playgrounds, and places to eat.

Flats in resorts (Albena, Golden Sands, SS Constantine and Elena) were the most actively sought-after type of property along the northern coastline this year. For foreigners, the attraction is prestige and relatively good infrastructure, tolerable construction density, and peace and quiet. Supply there is lower than demand, meaning higher prices than in the southern coast front-runners, Sunny Beach, Sozopol, and Nessebur.

Sunny Beach currently accounts for 37 per cent of the coastal supply. St. Vlas also marked a substantial increase in supply, the total number of flats peaking at 52 per cent.

Cumulative supply in Kavarna and Sozopol, according to Colliers data, increased by 33 and 62 per cent, respectively, and Elenite continued to lead the coastal market with almost 85 per cent of the entire supply being sold.

Pomorie has recently emerged as an interesting destination, offering balneology and other spa opportunities. An increasing number of investors and buyers were drawn by the mineral springs regions. The Sandanski area has already seen the launch of its first projects.

Taken as a whole, summer resorts enjoyed a rise in sales, compared to 2006 when the market experienced stagnation, according to Bulgarian Properties CEO Mihail Chobanov. He said that the increased interest exhibited by buyers coming from countries like Russia, Poland, Romania, and the Baltic states and the increased number of purchases made by local Bulgarian buyers. Moreover, the market started at very reasonable prices in 2007.

Bulgaria Named Fastest Riser on World's Property Market

8 December 2007, (news article from novinite.bg)

Bulgaria topped the latest Knight Frank Global Price Index with an annualised property price growth of 30.6 %.

Property prices in Bulgaria rose faster than anywhere else in the world in 2007, according to a survey by a leading British estate agency.

The European Union's newest member topped the latest Knight Frank Global Price Index with an annualised property price growth of 30.6 %. Bulgaria ranked three percentage points above the south-east Asian economic powerhouse of Singapore.

"Despite numerous concerns over the level of oversupply in a number of locations within Bulgaria - notably the winter ski resort of Bansko and selected coastal resort locations - Bulgaria has supplanted the previously top performing Baltic hotspot at the top of the Knight Frank league," the report declared.

Last year, the highest ranking country was Latvia, which saw property price growth of 56.9%. However, this dropped in 2007 to 10.9%, on concerns about overpricing in the Latvian capital, Riga.

Germanwings Offers Bargain Flights from Sofia to London, Paris, Berlin

28 November 2007; (news article from novinite.bg)

Low-cost carrier Germanwings will launch this winter bargain flights from Sofia to Paris, Berlin, London and Dresden via Cologne.

"The Smart Connect service will be introduced during the new winter season and is expected to save up to 30% on the ticket price," Andreas Engel, a representative of the company, said at a press conference on Wednesday.

The average one-way fare from Sofia to Paris, Berlin, London and Dresden via Cologne will total EUR 60, including all taxes and charges.

The company, which has been servicing flights from the capital Sofia since the end of March, reported 92% occupancy rate aboard its planes.

Bulgarian Construction Boom Stays Strong in Q3

The demand for new construction permits in Bulgaria continued growing in the third quarter of the year, with Black Sea port of Burgas receiving the largest number of permits, statistics board NSI said on Wednesday.

The total number of building permits issued in July-September was 4.878, compared to 4.660 permits issued in the previous three months.

Burgas accounted for 635 permits, while the other major Black Sea city, Varna, which led in the previous quarter, received 568 permits. Plovdiv got 498 permits and capital Sofia - 406.

Permits for residential buildings totalled 3.110, up from 2.735 in the previous quarter, for a total 2,097 million square meters of housing.

Administrative buildings permits totalled 114 for the period, up from 85 in the previous three months.

The Managing Director of the GE Real Estate Fund for Eastern Europe interviewed by the Bulgarian weekly Kapital, 17-23 Nov. 2007 (article summary)

Since 2005 General Electric has invested a total of €400m in Bulgaria in three real estate projects. After several years of growth many property market experts are predicting a possible crash in Central and Eastern Europe in the tailwinds of the US subprime crisis.

“Investors are a little bit more cautious now but Eastern Europe offers a very good risk to reward ratio” says Karim Habra, the Managing Director of GE Real Estate in Central Europe. In his view the Eastern European property market would rather benefit from the downturn in the USA because many investors are looking to invest here.  

“The ascension of Bulgaria and Romania to the EU has put these countries on the map of the property investors. We made our move a couple of years before because we were sure that was in the cards” says Habra. He has observed the same phenomenon in Poland and the Czech Republic. “The Bulgarian property market has room to grow even in comparison with neighboring Romania, especially in the high-end segment”.

A promising sign that the Bulgarian real estate market offers a good potential is the fact that the GE fund is planning to further invest in commercial, logistics and residential projects all over the country.  Mr. Habra’s strategy is not different from that in other countries in the region: investing in high quality office and commercial space such as shopping malls, and setting up a special company to deal with a portfolio of residential developments.

HOUSING IN BULGARIA COSTS 30 ANNUAL SALARIES

Tue 25 Sep 2007, sofiaecho.com
 
Almost 30 average Bulgarian annual salaries are needed to buy an apartment in Bulgaria.

This made Bulgaria one of the most expensive countries in the European Union to buy a house, Dnevnik daily said. Denmark was the cheapest with only 5.3 average annual salaries.

Real estate website Properazzi made the calculations for Bulgaria based on an annual income of 1884 euro (almost 3800 leva) and an average apartment price of 54 570 euro, the newspaper said.

Britons who complained houses were expensive in the UK and who had been attracted by prices in Bulgaria only needed nine average annual salaries to buy a home in the UK.

Properazzi representative Yanik Laklo said that “media reported that Britons could barely afford to buy any real estate, but data showed something different. Prices really were high. But to move up the real estate ladder in the UK would be a lot easier than in many other countries, possibly only with the exception of Scandinavia and Germany.”

The Danes are followed in the ranking by the Swedes and the Fins, who can afford to buy housing against 5.4 and 5.5 average annual salaries. Most expensive in Western Europe is Spain, where 12 annual salaries are needed, which is even more than in the Czech Republic with 11.

Press in Western Europe cited the research as an example of the serious differences in real estate prices within the EU and the enormous differences in income of its citizens, the daily said.

A Ukrainian journalist commented that with the dizzying prices in Kiev, an average Ukrainian citizen would have to work more than his entire life to pay for real estate only from his salary.

Bulgaria's economy 'continuing to grow'

ready2invest.co.uk, Article Date: 25/09/2007

Bulgaria's economy has experienced continued growth in the last year, according to new data.

The Sofia Echo cited figures from the National Statistics Institute showing that the country's gross domestic product (GDP) for the first half of 2007 was 6.4% higher than last year.

According to the institute, GDP for the first six months of the year was 24.5 billion Bulgarian leva (£8.8 billion).

This was largely attributed to the growth in the service sector during in recent years, which has developed as a result of increased tourism in Bulgaria.

The figures could also highlight the potential of the country as a good option for overseas property investors, as economic growth could have an impact on its property market.

It pays for Brits to live in Bulgaria

metro.co.uk

Wednesday, September 19, 2007

Unemployed Britons can now afford to live the high life, getting beer for 35p and a slap-up meal for less than £6 ... but they have to move to Bulgaria.

A ruling in the Balkan state has forced authorities to pay EU nationals out of work in the country the same benefit rate they would get at home.

It means Britons would receive £230 a month, which is more than the £140 -a-month average wage in Bulgaria, and nearly four times as much as the £60 a month that the average jobless person gets.

The ruling came after an unemployed German took a Bulgarian benefit office to the High Court, demanding to be paid benefits in line with EU laws, which the country has signed up to.

Michael Witwer, 30, who lives in the village of Vratsa, won the case and is now getting e570-a-month – equal to £397.

Bulgaria, which joined the EU in January, has one of the lowest costs of living in Europe.

When converted to the local currency, the lev, £230 goes a long way. A restaurant meal costs less than £6, and it can be washed down with a litre of beer for 35p or a bottle of wine for £3.50. Eating at home is even cheaper – a loaf of bread is just 30p.

And, unlike the high property prices in Britain, a two-bedroom flat in the Bulgarian capital Sofia can be yours for just £22,000.

The arrangement imposed by the court is standard in all EU countries, a Department for Work and Pensions spokesman said.

Bulgaria lures the bricks and mortar brigade from Britain

Robert Nurden and Sam Dunn report on buy-to-let opportunities in Eastern Europe
02 September 2007; independent.co.uk

It's hard to move for adverts offering cheap flats in Eastern Europe. Whether it's off-plan, new-build or old urban, the billboards, posters and flyers paint a picture of instant riches – and there's no shortage of interested parties.

For British investors, it's becoming harder to make money in the buy-to-let market at home. The five rate rises from 4.5 to 5.75 per cent since August 2006, and increasing anxieties about affordability, have slowed price rises, while there have been negligible increases in rental income.

So it's become more common to look east for cheap property investment – particularly since the expansion of the EU to include countries such as Poland and the Czech Republic.

One of the most hyped countries for investment has been Bulgaria, where you can still buy flats from ¿34,000 (£23,000). Although capital appreciation has slowed dramatically from the heady 40 to 50 per cent of the past three years, figures from www.world-ofproperty.co.uk suggest that, in both the first and second quarters of 2007, the average price of an apartment in Bulgaria rose by 5.4 per cent.

Low prices continue to be the main attraction. For example, you can pay £25,000 for a new flat (ready in November) in Platinum Residence III, an area close to the city centre in the Bulgarian capital of Sofia. Alternatively, £32,000 could secure you an apartment in the four-star All Seasons development, due for completion next June, near the popular Bansko ski resort.

An estimated 40,000 Britons now own property in Bulgaria, and there is still plenty of demand pushing up prices. But brokers warn that there should no longer be any expectations of quick, easy returns.

Don't attempt any overseas purchase without visiting the property at least once and double-checking every tax rule on rental income and capital gains. And make sure you don't sign any legal documents that you don't understand.

As for a home loan, if you don't have enough cash to buy outright – as many buyers in Bulgaria do – a broker can help find a good deal.

Miranda John, manager at independent mortgage broker Savills Private Finance International, says: "It's possible to borrow up to 75 per cent of the purchase price when buying property in Bulgaria. All loans are on a repayment basis but the lender may allow you to go interest-only for the first year. The maximum term is 25 years and you must be no older than 65 when the term of the mortgage expires."

Loans are only available in euros, she adds, and interest on variable-rate deals starts at 7.25 per cent.

Bulgarian ski real estate- Bansko, Borovets or Pamporovo?

Bansko, Borovets and Pamporovo are the three main choices for buying a ski property in Bulgaria and many potential buyers and skiers are scratching their heads to find out which one might be the best for them. In fact, there is no perfect place, as it’s often the case in the real estate business. Every one has to choose according to his/hers taste, vacation dreams and property investment objectives. Here is in a nutshell the rundown of the main features of Bansko and Borovets. Stay tuned for Pamporovo.

Part One - Bansko

It used to be an isolated typical Balkan village known to Bulgarians as the place of birth of many national figures and the Banski starets, a dry spicy sausage. The history of Bansko goes back ages as one can tell by the high stone fences built to defend houses and households from the Ottomans. As with most mountain communities, the people of Bansko were “workoholics” before Wall Street coined the term and part of their earnings went out to bribe the local Pashas or to keep the bad guys at bay. There weren’t any “magnificent seven” peasant lovers to protect them; they had to rely on themselves. And they did well.

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Part Two - Borovets

Unlike Bansko, Borovets is not an old Bulgarian village exhibiting its new ski resort and property investment ambitions. Numerous new developments, apartment hotels and ski condos are going up as we speak but everything is more spread out and subdued. And there are the old bourgeois villas from the time when it was called Chamkoria.

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SPAS AND AFFORDABLE PROPERTIES IN SUNNY SANDANSKI

Sandanski is hot. Red hot. And I am not only talking about the up trending real estate market. This charming town has been known for a long time by Bulgarians for its hot, dry, sunny weather and the therapeutic virtues of its air and mineral water. In the 90ies, Greek tourists have also discovered Sandanski before the property boom. Since January 2007, border hoping became even more popular precisely because there is no border any more. Sandanski is in Europe, one hour drive north of Salonika.

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BEST OF BALCHIK AND KAVARNA- BEACH & GOLF PROPERTY

Yet to receive widespread media coverage, the area surrounding Balchik and Kavarna is set to experience a boom of property investing over the next few years.

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