Bulgaria still tops property investment hotspots

Bulgaria has managed to further improve its reputation as a property investment hotspot in the last three months, according to property investment group Assetz.

The Assetz Property Tracker reveals that in the second quarter of 2006, Bulgaria offered investors a 137 per cent annual return on cash invested, up from 116 per cent in March.

The property firm said that borrowing is now also cheaper than it was in the spring, with mortgage rates having fallen from 7 per cent to 5.95 per cent.

Deposits required have also dropped from 30 per cent to 25 per cent, meaning greater gearing and bigger returns for investors.

"Bulgaria has now established a stable resale market and is proving it has staying power as an investment destination, especially with the strong tourist market in ski resorts such as Bansko, the introduction of no frills airline routes and the approaching EU membership expected in 2007," Assetz said in the press release.

"Any destination hoping to oust Bulgaria from the top spot where it has been since February 2006 still has a long way to go," the company added.

While Bulgaria continues to top the list, Assetz also predicts a bumper period for the Greek property market.

In the last 12 months, house prices in Greece have risen by 7.9 per cent, bringing the total return on cash invested to 25 per cent from just 2 per cent.

In addition, Poland's property market has had an excellent first half of the year, according to Assetz.

Prices in Poland have risen by about 25 per cent in the first six months of the year, the figures showed.

Assetz also said that Warsaw's property prices remain amongst the lowest in Europe.

The Spanish market is also continuing to grow, with capital gains of 12.8 per cent over the last 12 months.

Official house prices in Spain have continued to rise, but Assetz suspects this is mainly the result of rises in declared house prices, with less cash being involved in transactions.

This is because of increased transparency in the Spanish house-buying process, the company said.

However, the market continues to be underpinned by strong demand from Spanish locals as well as overseas investors, resulting in gross rental yields of 8 per cent and a total of 43 per cent return on cash invested.

Stuart Law, managing director of Assetz, said: "The choice of overseas destinations available to investors is growing increasingly wide, driven by EU expansion, new low cost flight routes and the prospect of hefty returns particularly in emerging markets such as Bulgaria and Poland.

"More traditional destinations such as France and Cyprus are still stacking up very well against the competition and hold huge appeal for investors who are attracted by a stable growth pattern, uncomplicated buying process and guaranteed resale market."

However, overseas property investors considering the US should look carefully at recent currency exchange rate swings.

US house prices have risen by about 12 per cent over the past year but much of this gain would have been wiped out by the recent currency shift between the US Dollar and the pound.

Assetz has also advised property investors not to ignore opportunities in the UK, where the six major price indices are averaging growth of 6.8 per cent.

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