Press articles about Bulgaria
Bulgaria – Real Estate Prices Go Up 25% Yearly
In 1996, Bulgaria was on the brink of economic crash – it didn’t happen thanks to the recommendations of the International Monetary Fund. Bulgaria is a member of the European Union and its real estate market yields large profit.
In 1996, Bulgaria was on the brink of economic crash – it didn’t happen thanks to the recommendations of the International Monetary Fund. Bulgaria is a member of the European Union and its real estate market yields large profit.
It can be said that Bulgaria is in great economic condition. The same applies to the finances; the inflation level is low; the NGP yearly growth is above the European average; the unemployment rate drops. The situation improves with every new day. A meeting of the representatives of German building industry and technology companies and environment protection companies with almost a hundred representatives of Bulgarian companies in 2004 was a turning point. The cooperation was willingly established by both sides, mainly because of the crisis in German economy – all because of more than a 10% drop in the order volume. German Chancellor, Gerhard Schroeder was accompanied by businessmen from global companies such as Commerzbank, Deutsche Bank, Siemens, EADS, Wintershall, E.ON and Ruhrgas during his visit in Bulgaria. The visit ended in signing an agreement on building a hotel at the Black Sea coast; the transaction was worth more than 150 million EUR.
Bulgaria is well aware of the potential the real estate market holds. The state decided to help the development of the market and introduced an act on investment support. All projects of value more than a 100 million leva [2 Lev – 1 EUR] will have the costs of connecting electric power and gas covered by the state.
Constant Growth
Since 2004, which was a record year for Bulgaria in terms of transactions concluded in the real estate market, the number of sale and purchase transactions has increased by 31% in comparison to 2003, when the price growth reached almost 70%. The experts then said the prices have not reached the peak and will sustain their growing tendency. And so it happened. In mid 2004, the average price of flats in Sofia, the capital of Bulgaria, exceeded the level of 500 EUR per m2. The prices at the beginning of 2005 the prices of the same type of property were at 15-20% higher level. The reasons for such a dramatic price growth consist in the competitiveness of the market and loan credits, significant increase in the number of foreign investments in comparison to previous years, good return on investment [about 15-20%] and stable macroeconomic indices.
The demand and prices were rapidly rising. The supply of office or commercial property was higher than the demand in the previous years. The tendency reversed in 2004, when the prices of office rentals increased by approximately 5 EUR per m2, sometimes reached the level of 25 EUR per m2 in the previous years. It is a 400% growth in a very short period. The purchase cost of office property reached the level of about 850 EUR per m2. The commercial property market situation was the same – especially in Sofia and two main harbor cities: Varna and Bourgas. The demand outnumbered the supply and the prices reached the levels of between 300 to even 3000 EUR per m2. Rental reached the astronomical value [in terms of Bulgarian economy] of 120 EUR per m2. The price however depends on the location and standard of a given real estate. Thanks to all this, however, it was possible to find estates ready for rental for 15 -25 EUR per m2, per month.
Building plots became very attractive for foreign investors [especially those located on the coast] – the prices of the plots increased by almost ¼ in 2004 in comparison to the previous year. The prices of the plots depended on the distance from the sea and the level of infrastructure development in a given location. The diversity of prices was huge – from 15 EUR per m2 to almost 200 EUR per m2.
The Prices Are Not European Yet
The following years were characteristic of an even greater traffic in the real estate market, which resulted in a significant price growth. In 2006, the value of turnover in the real estate market is said to be about 10 billion EUR [a 25% increase in comparison to 2005]. It should be remembered that the growing interest of international companies and other countries in Bulgaria does not boil down to the lower labor costs or attractiveness of the land only. Bulgaria, as a state located in the center of the Balkan peninsula [at the border of Europe and Asia], is a country of strategic significance. It could become the right place for servicing the future south-eastern European market by and for many international companies. This market consists of almost 50 million potential consumers. The half of European transport routes run through Bulgaria. The development and improvement of capacity of the state will significantly improve its economic situation and draw the attention of investors. Bulgaria is well aware of that – it was granted subsidies within the pre-access funds from the EU from PHARE programs for development of road and railway networks. Bulgaria has been constantly developing and improving its road networks to direct more cars and trains to its territory.
The access of Bulgaria to the European Union at the beginning of 2007 made the interest in its market even greater. The prices of flats have increased by more than 10% during the first quarter of this year. According to the official statistic, you have to pay about 800 EUR per m2 in Sofia. However, comparing the offers of real estate agencies with relevant offers in Poland it has to be admitted that the level of prices are underrated and the prices are much higher in many cases. It all depends on the standard and location of a real estate.
Source: Tomasz Idzikowski wiadomości24.pl (29 april2007)
It can be said that Bulgaria is in great economic condition. The same applies to the finances; the inflation level is low; the NGP yearly growth is above the European average; the unemployment rate drops. The situation improves with every new day. A meeting of the representatives of German building industry and technology companies and environment protection companies with almost a hundred representatives of Bulgarian companies in 2004 was a turning point. The cooperation was willingly established by both sides, mainly because of the crisis in German economy – all because of more than a 10% drop in the order volume. German Chancellor, Gerhard Schroeder was accompanied by businessmen from global companies such as Commerzbank, Deutsche Bank, Siemens, EADS, Wintershall, E.ON and Ruhrgas during his visit in Bulgaria. The visit ended in signing an agreement on building a hotel at the Black Sea coast; the transaction was worth more than 150 million EUR.
Bulgaria is well aware of the potential the real estate market holds. The state decided to help the development of the market and introduced an act on investment support. All projects of value more than a 100 million leva [2 Lev – 1 EUR] will have the costs of connecting electric power and gas covered by the state.
Constant Growth
Since 2004, which was a record year for Bulgaria in terms of transactions concluded in the real estate market, the number of sale and purchase transactions has increased by 31% in comparison to 2003, when the price growth reached almost 70%. The experts then said the prices have not reached the peak and will sustain their growing tendency. And so it happened. In mid 2004, the average price of flats in Sofia, the capital of Bulgaria, exceeded the level of 500 EUR per m2. The prices at the beginning of 2005 the prices of the same type of property were at 15-20% higher level. The reasons for such a dramatic price growth consist in the competitiveness of the market and loan credits, significant increase in the number of foreign investments in comparison to previous years, good return on investment [about 15-20%] and stable macroeconomic indices.
The demand and prices were rapidly rising. The supply of office or commercial property was higher than the demand in the previous years. The tendency reversed in 2004, when the prices of office rentals increased by approximately 5 EUR per m2, sometimes reached the level of 25 EUR per m2 in the previous years. It is a 400% growth in a very short period. The purchase cost of office property reached the level of about 850 EUR per m2. The commercial property market situation was the same – especially in Sofia and two main harbor cities: Varna and Bourgas. The demand outnumbered the supply and the prices reached the levels of between 300 to even 3000 EUR per m2. Rental reached the astronomical value [in terms of Bulgarian economy] of 120 EUR per m2. The price however depends on the location and standard of a given real estate. Thanks to all this, however, it was possible to find estates ready for rental for 15 -25 EUR per m2, per month.
Building plots became very attractive for foreign investors [especially those located on the coast] – the prices of the plots increased by almost ¼ in 2004 in comparison to the previous year. The prices of the plots depended on the distance from the sea and the level of infrastructure development in a given location. The diversity of prices was huge – from 15 EUR per m2 to almost 200 EUR per m2.
The Prices Are Not European Yet
The following years were characteristic of an even greater traffic in the real estate market, which resulted in a significant price growth. In 2006, the value of turnover in the real estate market is said to be about 10 billion EUR [a 25% increase in comparison to 2005]. It should be remembered that the growing interest of international companies and other countries in Bulgaria does not boil down to the lower labor costs or attractiveness of the land only. Bulgaria, as a state located in the center of the Balkan peninsula [at the border of Europe and Asia], is a country of strategic significance. It could become the right place for servicing the future south-eastern European market by and for many international companies. This market consists of almost 50 million potential consumers. The half of European transport routes run through Bulgaria. The development and improvement of capacity of the state will significantly improve its economic situation and draw the attention of investors. Bulgaria is well aware of that – it was granted subsidies within the pre-access funds from the EU from PHARE programs for development of road and railway networks. Bulgaria has been constantly developing and improving its road networks to direct more cars and trains to its territory.
The access of Bulgaria to the European Union at the beginning of 2007 made the interest in its market even greater. The prices of flats have increased by more than 10% during the first quarter of this year. According to the official statistic, you have to pay about 800 EUR per m2 in Sofia. However, comparing the offers of real estate agencies with relevant offers in Poland it has to be admitted that the level of prices are underrated and the prices are much higher in many cases. It all depends on the standard and location of a real estate.
Source: Tomasz Idzikowski wiadomości24.pl (29 april2007)