NEWS FROM ALL SIDES: What does the future hold for Bulgaria’s real estate market?
The real estate market at present
Clive Leviev-Sawyer
The issue: Scores of column inches in foreign newspapers and vast volumes of cyperspace occupied by the websites of real estate agencies have been devoted to the view that Bulgaria’s property market is the place to be. According to a report by specialist UK-based website assetz news on March 14, “confidence in the Bulgarian property market appears to be on the rise, as growing numbers decide they are prepared to invest their money in properties throughout the country”. Few would disagree, assetz said, that the Bulgarian property market currently had “phenomenal potential”. This potential was being stimulated by the country’s expected accession to the European Union and with the comprehensive overhaul being done to Bulgaria’s infrastructure. “If Bulgaria does indeed follow in Spain’s example in terms of a sustained property boom, investors who are currently getting their hands on remarkable deals will be set to make significant returns in the years to come,” assetz said. Media reports in the UK and Ireland, along with some other European countries, in recent months have enthused about Bulgaria’s Black Sea property markets, as well as those in mountain resorts, and have said that there is rising demand for office space and accommodation in the capital city of Sofia. The overall message is that Bulgaria’s property market is at very least a safe bet, and quite possibly one that could guarantee a win. Yet, there are other factors to consider. Much of the hype about Bulgaria’s property market is based on the relatively affordable prices of property. Given the popularity of the country as a place to invest in real estate, with the concomitant demand, prices are rising steadily. While this may be a good argument to invest now, to be sure of an optimum return, an argument may be made that the future is no longer what it used to be, and that in time the market’s boom must fade because of an inevitable increase in prices. At the same time, the boom in the property market is often linked to the popularity of Bulgaria as a tourism destination. However, the tourism industry is not without its challenges. First, that prices are rising, second, that “construction tourism” has been the foundation of much bad publicity for the country, third, the current shortcomings in low-cost flight services to Bulgaria. These factors will not kill either the tourism or the real estate industries, but they may limit its potential. Is Bulgaria’s property market, then, a “bubble” that inevitably must burst? Or is what is being seen now simply the normalisation and growth of an emerging, and very attractive, market? http://www.sofiaecho.com(20.03.2006)