Rising property prices in Bulgaria

The average price of a house in Bulgaria's cities shot up by more than 36 per cent in 2005, according to the National Statistical Institute.

Property investors from the UK have been watching the market intently in the last few years and it is generally perceived as being one of the best prospective investment spots in Europe. With a number of problems still to be ironed out, however, many have watched cautiously from afar, while others have taken a gamble and acquired property for astonishingly low prices.
Those who were prepared to take this gamble will be delighted to hear that in addition to the 36 per cent rise in house prices last year, there was a substantial increase in the cost of apartments across the country.

In 2004, the average apartment cost less 190 GBP per square metre, but this had reached 260 GBP per square metre by the end of 2005.

Also encouraging is the fact that growth appears to be evident throughout Bulgaria, with Sofia no longer necessarily the best option for investment.

Nonetheless, an increase of 20 per cent in Sofia means that the capital is still one of the most exciting prospects, with an expected commercial boom in the capital likely to push prices up considerably before 2010. Apartments in the capital also continue to be the country's most expensive.

Varna fared even better last year, with a 25 per cent increase drawing attention to Bulgaria's third biggest city. As the main port for both naval and commercial shipping, Varna is developing a cosmopolitan atmosphere that will undoubtedly make it attractive to local and foreign house buyers.

Incredibly, annual price increases in some of Bulgaria's smaller cities were in the region of 70 per cent and some investors will see this as evidence of the merit of investing away from the capital.

As Bulgaria prepares for EU accession in the next couple of years, property prices are continuing to rise in even the most unlikely areas and the decision of where to invest is unquestionably becoming more difficult.

Bourgas, for instance, saw a rise in property prices of 46 per cent last year. It is the fourth largest city in Bulgaria and is situated in the south-eastern region of the country. As a Black Sea city, its climate is certainly favourable, while an excellent transport infrastructure has laid the foundations for strong growth in both the tourism and industrial sectors.

Many investors will prefer the prospect of buying property by Bulgaria's ski resorts, however, with the reputation of the snow season growing each year and a bid for the 2014 Winter Olympics attracting a great deal of attention to the constantly improving facilities.

With higher levels of mortgage lending in the country and an influx of foreign investors, Bulgaria is undoubtedly becoming one of the most rewarding investment options in Europe.