Bulgarian property market gains appeal

Assetz News, 8th May 2006

Property investment in Bulgaria has in recent years been something of a slow and steady affair, with many investors appreciating the potential for capital growth but holding out for further encouragement.

It is a situation that is gradually being transformed, however, with a number of key factors now uniting to position the country as one of the most exciting investment hotspots in Europe.

A quick look at the house price growth in the first quarter of 2006 gives an idea of the increasingly tempting nature of the property market in Bulgaria.

The Sofia Echo has reported that house prices increased by 4.7 per cent in the first quarter when compared to the last quarter of 2005. Citing figures from the National Statistics Institute, the publication states that the average apartment price in the first quarter reached ˆ411 per square metre, which was up from ˆ383 in the previous quarter.

With the average apartment costing ˆ670 per square metre, the capital city of Sofia was leading the way, with the popular Black Sea town of Varna not far behind at ˆ632.

As is still typical of Bulgaria, some areas saw anomalously high growth in the first quarter, with the Danube town of Vidin seeing house prices soar by 51.5 per cent.

Vidin was one of the unfortunate towns that endured significant damage from the recent floods, however, and it is inevitable that the market will suffer somewhat from this destruction.

Aside from purely financial motivation for purchasing a property, Brits are increasingly coming to appreciate that Bulgaria offers some of the most stunning landscapes in Europe. For this reason alone, the country is attracting holiday home buyers from the UK and elsewhere, with the attractive Black Sea regions and the burgeoning ski resorts competing for the attention of the investors.

Bulgaria is one of the bidders for the 2014 Winter Games, which is perhaps evidence in itself of the country's ambition for its ski slopes, but visitors to the likes of Bansko and Borovets have already seen how far the country has come.

In the ski season that has just come to an end, the number of skiers visiting Bansko increased by 35 per cent, reports the Sofia News Agency. With hope and anticipation rising in relation to the Winter Games, Bansko is also set to benefit from 1,000 new beds within hotel rooms and apartments.

Bringing the Winter Games to Bulgaria is perhaps second only to achieving EU accession in terms of the potential impact on property investment. Both factors will lead to a huge rise in the number of holiday makers visiting the country and it is a development that will clearly boost rental demand for the overseas buy-to-let investors.

Bulgaria undoubtedly still has its problems and many of these will need to be ironed out before the property market can seriously compete with the likes of Spain and France. With properties still available at a fraction of the prices seen elsewhere in Europe, however, the appeal to many investors is unquestionable.

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