ECONOMY

Bulgarian real estate continues to attract foreigners’ attention

SOFIA – Bulgaria remains a hot spot for foreign real estate investors despite a clear slowdown in property price growth, experts said yesterday – and they expect no change in demand even if the nation’s entry into the European Union is delayed. Property prices were expected to rise between 14 and 24 percent this year, compared to last year’s spectacular increase of 45 percent, according to statistics released yesterday by the National Association of Real Estate Agencies. «The increase in prices is slowing down, but the market is booming,» said the association’s head, Orlin Vladikov. «I expect its volume to exceed last year’s record of 3.3 billion euros.» Foreign investor interest in Bulgarian property remains high, and the group expects it to stay that way next year as well, Vladikov said. «In 2006, we expect a serious influx of Spanish investors, who are looking to secure winter resort offers for their beach resort customers.» The number of property deals struck this year was estimated at 204,000. Some 37 percent of them were made by foreigners, many of them British, Vladikov said. Foreign interest in Bulgaria has been fueled mainly by low prices, but also by the country’s overall stability and the prospect for European Union entry, now scheduled for 2007. The EU, however, has warned Bulgaria that its membership could be postponed by a year if key reforms in the judiciary and administration are not swiftly put in place. Vasil Nikolov, a manager of the London-based Bulgarian Dreams agent, said the company has seen an increase in British clients looking for property bargains in Bulgaria. «Interest is high and I don’t expect this to change even if the European Union decided to delay Bulgaria’s entry,» Nikolov said. The Balkan country’s look has drastically changed since the collapse of communism in 1989. In the capital, Sofia, and in other big cities, hypermarkets, shopping malls, and luxurious apartment and office buildings have mushroomed along with renovated houses in downtown areas. Foreign buyers have been mainly seeking holiday homes on Bulgaria’s Black Sea coastline and in its mountain resorts, as well as high-quality homes in Sofia, said Strakhil Ivanov, general manager of the Yavlena real estate agency. With prices of at least 500 to 1,000 euros per square meter, these types of property are expensive for most Bulgarians, who live on an average monthly wage of 150 euros. Foreign interest, however, has continued to drive prices up. «The average price trend is for a slowdown, but there are regions and types of property that register a steady price growth,» Ivanov said. «Prices of Sofia’s luxury property, for example, have increased by some 20-25 percent this year.» In the southern mountainous region of Smolyan, known for its ski resorts and picturesque villages, property prices rose between 50 and 80 percent this year, Yavlena statistics show. Vladikov sought to diffuse fears that the slowdown in property price growth might chase investors away. «Prices of quality property will continue to rise smoothly, and the general slowdown trend is just a sign for the market’s stabilization, which is a good message to investors.»