Further investment boosts Bulgarian property market

Hardly a week goes by without news emerging from Bulgaria about another planned investment project as the country looks to enhance its reputation in advance of EU accession.

In addition to large-scale property investment, officials are also working hard to stamp out corruption and to combat some of the other legal concerns that have been Bulgaria's perennial weakness in years gone by.

It was reported in the Sofia Echo today that health minister Radoslav Gaidarski is now in the process of producing an anti-corruption strategy for healthcare institutions. This forms part of the country's overall desire to rid itself of the problems that have plagued it in the past, with prime minister Sergei Stanishev fixed on the idea of modernisation at every level.

The new strategy for the healthcare institutions is in direct response to the European Commission's monitoring report on May 16th, it is reported.

Bulgaria was criticised for levels of corruption in both healthcare and education, but the rapidity of the response in beginning this anti-corruption strategy is testament to the resolution to meet any conditions specified by the EU.

The issue of EU accession is important for Bulgaria for a whole host of reasons, but it is also particularly significant for property investors who expect the occasion to coincide with notable house price growth in the country.

A suitable parallel can be drawn with Spain and it is a comparison that is particularly apt because of Bulgaria's blossoming reputation as a tourist haven.

The US Department of State recalls that Spain's accession to the European Community in January 1986 required it to open up its economy. It also had to modernise its industrial base and improve its general infrastructure. Another key issue was that it had to revise economic legislation to conform to EU guidelines.

As a result of all of these amendments Spain was able to increase gross domestic product (GDP) growth, reduce public debt to GDP ratio, significantly reduce unemployment from 23 per cent to 15 per cent and reduce inflation to less than three per cent.

The vast majority of these factors are also applicable to Bulgaria 20 years later and so it is no surprise that experts have been drawing comparisons between the two countries. Property prices in Spain soared after it joined the EU and it is a fortune that many foresee for Bulgaria too.

Questions certainly remain regarding improvements to infrastructure but there is no doubt that the authorities are answering them in the right way. The Associated Press reports that the government has now invited five bidders to place binding offers for the construction of a ˆ160 million bridge across the Danube River, which will link the Bulgarian port of Vidin to the Romanian city of Calafat by both road and rail.

Another example of the progress that is being made, this provides reassurance to investors that the commitment to modernisation and expansion is strong. Bulgaria already has a thriving ski industry thanks to Bansko while the Black Sea resorts mean it is particularly popular in the summer.

As Bulgaria continues to prepare thoroughly for EU accession, optimism is high that it is developing into one of Europe's most dynamic locations for property investment.