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Bulgaria Property - InvestmentsBulgaria Property News

01-04-2006 Bulgaria Trails France, Spain as Top Property Buyers Destination

Bulgaria ended up at No 4 spot among the most popular destinations to British overseas property buyers in a ranking, topped by France and Spain.
Foreign currency specialist HIFX reported that France and Spain accounted for almost half (43 per cent) of all its currency transactions for buying property abroad in March.

Australia was in third place with 11 per cent of transactions, followed by Bulgaria (ten per cent), USA (four per cent), Canada (two per cent) and South Africa (one per cent).

The survey shows that the majority of Brits are looking for an overseas property that can be used for regular holidays, is easily rentable, with cheap flights, and offers a quick escape to the sun.

London real estate consultancy Assetz commented that people are still flocking to Bulgaria to invest in the emerging property development sector there, due to the fact that it is on the verge of entry to the European Union (EU).

"When that occurs in 2007, property prices in the country are expected to rocket even more quickly than at present."

"However, the country has a long way to go before it manages to catch up with the property investment currently being poured into the more traditional destinations of France and Germany," Assetz added.

France and Spain have shown themselves to be reliable over many years and this kind of security explains why they both remain such popular destinations for buy-to-let investors from the UK.



Bulgaria was declared top overseas property hotspot in a London consultancy ranking that compared the total return on cash in real estate markets.

With yields rising to 12% and capital gains remaining impressive at 36%, Assetz assessed the total return on cash invested in Bulgaria at 116% last year.

This statistic has pushed Bulgaria above Cyprus in the chart for total returns on cash invested, backing up the popular claim that Bulgaria is now comparable to Spain in the 1980s.

While experts have been predicting for a number of years that Bulgaria will emerge as a leading choice for investors, the new research firmly positions the country at the top of the chart, says Stuart Law, managing director of Assetz.

The Assetz research suggests that the steep incline in house price increases will level off to some extent before the year's end, but market growth is expected to remain high.

"The ski resorts of Bansko and Borovets continue to draw a huge amount of interest from property seekers, with significant construction projects now underway to accommodate the demand."(Source Sofiaecho)


The assets leased by the Bulgarian leasing companies totalled 1.2 billion leva by the end of 2005, according to Bulgarian National Bank (BNB) data, published on February 23.

The central bank overview is the first-ever official statistics on the country’s leasing industry. It was made possible by legislative changes that obliged leasing companies to report the value of their leasing contracts to the BNB on a quarterly basis.
The leasing industry expanded by 26 per cent in the last quarter of 2005, when it leased assets worth 250 million leva.

The outstanding net lease receivables under financial leasing contracts were reported at 1.16 billion leva or 97 per cent of all leasing contracts.
Transport vehicles are the most frequently leased asset and account for over 60 per cent of all leasing deals.
Outstanding net lease receivables under vehicle leasing contracts rose 8.9 per cent by the end of 2005 (compared to the end of September 2005) to 341 million leva.

The outstanding net lease receivables under industrial equipment leasing contracts increased by 27.8 per cent at the end of September to 289.1 million leva at the end of 2005.
The outstanding net lease receivables under property leasing contracts jumped by a gigantic 260 per cent on end-September to 96.6 million leva at end-2005.In Bulgaria, more than 200 companies are registered to offer leasing. Of these, only about 30 are active and form the leasing market in the country.

The structure of the market, determined by contract term is relatively similar to those of other Central and Eastern European countries, shows a report by the Bulgarian Association for Leasing.
The majority of equipment leasing contracts have a maturity situated between two and five years. More than 74 per cent of all new leasing contracts (excluding real estate) fell into this category in 2004 and 80.11 per cent in the first half of 2005.

Most real estate leasing contracts have tenor longer than eight years. The increase of real estate contracts between 2004 and 2005 was around 100 per cent and most of the new contracts fell within this time frame.
The share of shorter contracts of up to four years and those between four and eight years went down compared to 2004 while those longer than eight years rose from 8.22 per cent in 2004 to 83.27 per cent in 2005. (Source Sofiaecho)



The Times reports winter resorts in East European countries offer attractive vacation property.The publication writes various misconceptions concerning Bulgaria still persist.
Yet, the country’s resorts present a rather different picture from popular beliefs. Bansko, one of the leading ski resorts in Bulgaria cannot challenge renown ski destinations but is expanding fast.

Chariman of the Manhattan Loft Corporation Harry Handelsman said Bansko has a real history, unlike other European ski resorts. It features traditional mehanas, Bulgarian folk music and authentic settings.In addition, prices in Bulgarian resorts remain relatively low compared to European standards. The historic centre of Bansko is untouched, yet various construction companies develop other parts of the city and offer property for sale.
Infrastructure accommodates the tourist inflow for now, the publication reports. Plans for further construction are currently discussed (Source Sofiaecho)


Sofia already experiences problems with providing terrains for new constructions, Capital weekly reports. At the same time 34 villages in the Sofia region house 6.5 per cent of the 1.2 million citizens of the capital.
To escape from the noise, traffic and lack of clean air a third of the Sofia residents would move to the suburbs in the coming 15 years according to predictions.

Most new construction occurs in the region near Vitosha mountain. In the past, the region housed only villas but is now turning into a residential suburb.
Construction terrains are still available in Sofia but the future of the property market is in the eastern and southern suburbs. Sofia would merge with the Vitosha mountain and the tendency is natural. All of this would happen gradually, property experts said.

Most consumers are still hesitant accepting a new product but with the correct marketing strategy property sales in the new suburbs would increase soon.
Construction in Sofia itself would turn to housing complexes and one-family houses, property experts predicted.

People now have more disposable income and a middle class is beginning to emerge. These people prefer calmer surroundings and the interest toward property in the Vitosha region is growing. (Source Sofiaecho)



Property prices in Bulgaria increased by 36.6 per cent in 2005, compared to the previous year, according to National Statistical Institute data. In 2004 the average apartment price remained below 540 leva a sq m, rising to 738 leva a sq m in 2005. Prices vary according to region. In Sofia and Varna the increases were between 20 and 25 per cent. In smaller cities, prices rose by more than 70 per cent.
Apartments in the capital city continue being most expensive, at an average 1222 leva a sq m. The cheapest property is in Vidin, 356 leva a sq m. Bourgas property became significantly more expensive, by 46 per cent. Property in the Black Sea city costs almost as much as apartments in Sofia. Experts said that the boom that Sofia experienced a few years ago is now spreading to other cities, Dnevnik newspaper reported.Data also shows that construction is continuing at full pace throughout the country. Construction permits issued in 2005 numbered 55 per cent more than those in 2004. Smaller apartments are now more preferred than larger ones, while larger buildings are being constructed. The process is tied to the popularity of housing loans. More users are buying property with loans, experts said. (Source Sofiaecho)



Bulgaria will be one of the top property markets in Europe during 2006, according to a research by the Chinese publication, The South China Morning Post. Property prices in the country will increase by 15 per cent, the highest increase a European country will experience in the coming year. Consultants from Knight Frank consulting company predict that though Bulgaria needs to develop further, the country will experience dynamic interactions in 2006. Apart from its expected EU membership, the country is developing its infrastructure, which in turn will increase property prices. Prices in France and Italy will increase by only five per cent. Significantly higher growth is expected for Hungary and the Czech republic, according to the publication’s prognosis, Dnevnik newspaper reported.
It also predicted that the property market throughout Eastern Europe would experience growth, while Western European countries faced a slower growth rate. Most Western Europeans interested in the property market were likely to invest in Eastern Europe.(Sofia Echo)


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



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.

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