Bulgaria Property News

Ski resorts are the future of Bulgaria's real estate business, many UK experts believe.

The Assetz website has published this week a report on the potential of Bulgaria's mountains to attract international agents.

Bulgaria's future nearing EU accession is a major factor for the increased investment flow, the story underlined.

It pointed at Sofia's bid to host the 2014 Olympic Games as another booster.

Investors can be almost guaranteed that the Bulgarian economy will grow, the UK website said, adding that investing in Bulgarian properties was less risky than the business in London.

Plus, many regions in Bulgaria remain far cheaper than other areas of Europe where price inflation has jumped significantly in recent years, Assetz said. (Source www.novinite.com)

Rupert Murdoch, chairman and chief executive of global media conglomerate News Corporation, is looking to Bulgaria for his next land grab, The Independent wrote.

News Corp, through its subsidiary Balkan News Corporation (btv), is planning to spend an estimated 50 million pounds on bolt-on acquisitions such as radio and outdoor advertising businesses over the next months.

"Analysts say Eastern Europe offers far better investment opportunities than the mature media market in Western Europe, which suffers from sluggish advertising growth, yet valuations of media companies remain high."

The Independent points out that GDP growth of at least 5 per cent is forecast in Bulgaria for this year, more than twice the growth forecast for the UK and some five times higher than eurozone forecasts.

The property tax valuations in Bulgaria will drastically increase with up to 100%, Deputy Finance Minister Georgi Kadiev explained.
The expected increase will be from 30% to up to 100% in 2006. This will result in boosted taxes "Building" and "Garbage," as they are estimated on the base of valuation taxes.
Kadiev explained that the most drastic increase would be registered in the resort areas, where the property tax valuations might go up by 100%.
Bulgaria's deput finance minister also said that such an increase will also be necessary in 2007.

Bulgaria's average apartment prices are continuing to grow, official statistics show.
A square meter cost BGN 730 (EUR 373) until June, then jumped to BGN 751 (EUR 384) in the third quarter of this year. In capital Sofia the increase was from BGN 1,188 to BGN 1,256 (from EUR 607 to EUR 642).Prices in the country's second largest city have also increased, as well as in the major seaside center of Burgas.
In Varna - the main Bulgarian port city - floorage costs have remained unchanged.

Black Sea Bulgaria Property Fund to build apartments in ski resort Pamporovo.
The Black Sea Property Fund, managed by Jersey-based Development Capital Management Limited, said it will invest 6.9 mln euro in the construction of 300 upmarket holiday apartments in Bulgarian ski resort Pamporovo, in the Rhodope mountains, to take advantage of the opportunities for year-round tourism in the area.
The complex, which will also incorporate retail, spa and restaurant facilities, should be completed by the start of the 2007/2008 winter season.
The Black Sea Property Fund was listed on the London Stock Exchange's AIM in March 2005. Some 40% of the proceeds from the flotation have been invested in 5 projects in Bulgaria, including schemes for a combined 2,800 apartments.
In related news, Dow Jones Newswires reported that Irish financial group Hibernian has just launched a European Residential Property Fund which will concentrate initially on the Eastern European countries which are new members of the EU or are waiting to join.
The European Residential Property Fund says it is the first to offer investors an indirect route into residential property investment: most funds offering access to property investment concentrate on commercial property only. The Hibernian fund will invest initially in city center apartment blocks in Warsaw and Prague and in holiday accommodation in Croatia and Bulgaria. Lewis Charles Sofia Property Fund and Bulgarian Property Developments and are the other 2 AIM-listed funds created for investment in Bulgaria's property market.

More than 300 investment projects at the cost of over BGN 1 B can be seen at the opening of the Real Estate Expo in Sofia.
The third edition of the major event, which is held twice a year, running as Imoti Expo kicked off Friday to continue four days in the International Expo Centre. Participants include companies from various real estate sectors such as construction, agencies, banks and financial institutions. The construction and real estate are among the speediest developing sectors in the country, with a growth of 15-20% on an annual basis.
The forum gathers at a unique venue not only leading real estate agencies, but also banking institutions and municipal associations working in the field of local administration reforms.

Property taxes in bigger cities like Sofia Varna and Bourgas are to increase by 30 per cent. The increase is a result of the higher tax valuation of real estate that is to take effect at the beginning of next year. The Finance Ministry is working on changes to the law on local taxes, by which property tax valuations will increase by 30 per cent in towns, by 25 per cent in smaller cities and by 20 per cent in small towns and villages. As a result of this, real estate taxes will increase as well. The exact tax is determined through additional other factors. These include the type of construction, location within a building and infrastructure characteristics.
The International Monetary Fund has demanded an update to property valuations, which determine the amount of taxes. The IMF based its request on the increasing market prices of Bulgarian property. Data of the National Statistical Institute shows that from 2000 to 2004, real estate in bigger cities has become 200 to 300 per cent more expensive. At the same time, tax valuations were last updated in 1998, Novinar newspaper reported.

Six airlines, including budget carriers easyJET, May Air, SkyEurope and Air Berlin, are interested in flying to and from the Sofia International Airport, said Mariana Kirilova, head of the airport's marketing department.
Slovakia's SkyEurope is likely to be first of the batch to launch a regular service to and from Sofia, starting in December.
Hungary's Wizz Air became in September the first no-frills carrier to offer lights to and from the Bulgarian capital.
Italy's May Air intends to start flying from Sofia to Bologna and Venice from 2006.
Britain's easyJET has no plans for flights originating in Sofia but intends to use the airport as a gateway to the region where it will reach destinations like Athens, Bucharest and Kishinev.
Germany's Air Berlin is preparing a service to Berlin.
The Sofia airport will keep the charter, budget and inland carriers operating form the old passenger terminal while the new terminal will be used exclusively for regular international flights.
Dutch airline KLM is interested in adding flights from Sofia to Copenhagen, said the management of the Sofia airport. Qatar Airways and Air China have similar plans.
Hainan Airlines, China's first private air carrier, is also eyeing Sofia as possible flight destination but its service is at least 2 years away since that long it would take to comprehensively survey the Bulgarian market.
A Canadian airline is interested in launching a charter trans-Atlantic service, the airport said.
The International Air Transport Association estimates that the Bulgarian aviation market will expand 20% by 2007, the target date for the country's EU accession, with room for 5-6% annual growth increments afterwards.(Dnevnik)

TAX valuations of real estate in Bulgaria will rise by at least 20 per cent in 2006, which would also push up property taxes, refuse fees, and notary charges for transferring property, Deputy Finance Minister Georgi Kadiev said on September 29.

All these taxes and fees are based on a property’s tax appraisal. The tax value of each property would still significantly differ from its market price, which in the cases of some real estates in Sofia has increased by 200 to 300 per cent over the past two to three years.

The reason for the evaluation update was the International Monetary Fund’s requirement, accepted by the previous cabinet, for an increase in real estate taxes. The increase would be determined on the basis of an urban cost analysis from the past three years, Kadiev said.

Currently, property tax is 1.5 per cent of the tax value of the property. The last time that real estate evaluations increased was in 2002. At the time, the cabinet changed calculation methods, which led to a 60 per cent increase. In the past year, a number of organisations have demanded different methods for real estate tax calculation.

Kadiev said the National Statistical Institute was still expected to contribute its data to the calculation of the new values and taxes, but he was certain the increase would be no less than 20 per cent.

The need for new real estate valuations was shown in the latest report on housing prices in Bulgaria by independent analytical company Industry Watch.

These prices rose by about 44 per cent on an annual basis by the end of the second quarter of 2005, compared to 55 per cent by the end of the first quarter, Industry Watch said on September 30.

Unlike the first quarter, the rate of price increases was considerably weaker, with only the four largest cities, namely Sofia, Plovdiv, Varna and Bourgas, registering growth of more than 15 per cent, compared to the first quarter, when there was a more than 30 per cent rise in three cities.