The cheap Bulgarian property market attracted many investors from all over the world. People have been buying properties in Bulgaria for both personal use and investment purposes.
Bulgaria has improved consistently for the last 15 years, but still it could be defined as developing country. As the global property agency and consultancy Knight Frank reported, in the last quarter of 2007 Bulgaria has continued to see the strongest growth in house prices of the countries included in the Knight Frank Global House Price Index. Even though the prices for flats over the year increased by nearly 34%, they remain relatively low compared with much of Central and Eastern Europe. The average price per sq. m. of property in Bulgaria is 914 EUR, in the capital Sofia – about 1100 EUR.
According to Bulgarian national radio, the real estate market in Bulgaria reached its peak as the buyers refuse to buy at prices that exceed their expectations. Over the summer 2008, the supply has increased by 50% over demand.
The foreign investors looking for a cheap property near the coastal or mountain resorts caused the Bulgarian property demand that determined higher property prices as well as more developments put on the market. In the beginning of 2008, Colliers international reported that well-established resorts like Sunny Beach at the seaside and Bansko in the mountains has reached saturation. The real estate became highly risky speculative investment in these areas, so the prices might go down because of supply surplus. But overall, there should not be a systematic and thorough threat to the real estate market in Bulgaria, according to Bulgarian national radio.
The capital of Bulgaria - Sofia is considerably booming urban center with relatively more sophisticated market, which has attracted foreign opportunity investors in recent years. Sofia appears to be attractive for investment purposes as the population has doubled over the past 5 years, reaching 1.2 millions; retail giants are entering the market; foreign and local investments increasing; demand for housing continues to overweight supply and demand for higher quality housing rises.
Recently, the amount of housing bought for investment purposes is going down as a result of the increasing mortgage credit interest rates and local Bulgarians emphasize that real estate prices in some regions are unnaturally high comparing to the infrastructure and income of society.
Even though it seems to be quite risky to invest in Bulgarian real estate market, there are such opportunities when object is selected considering to location as well as extra services, high-end finishing and furnishing and, surely, the exit strategy. Except only investment purposes, Bulgaria offer holiday homes for people seeking spend their vacations in mild climate or move there after retirement.
