Alert over Bulgaria

LONDON (Reuters) – Overseas property investors should be wary of Bulgaria as market growth collapses and rental competition heats up, but prospects still look good in France and Poland, according to a report this week. Total annual returns on Bulgarian property have plummeted to 44 percent from 104 percent three months ago, according to the latest quarterly investment tracker from property investment firm Assetz. Annual house price growth in the country has slowed to 17.8 percent from 36 percent, with the Bansko ski region showing price falls of 2.1 percent. Property prices in Bulgaria as a whole only grew 1.6 percent in the second quarter, while the oversupply of investment properties has led to fierce competition for rentals. Stuart Law, managing director of Assetz, said: «This is an interesting time for many overseas markets. Bulgaria is facing a period of readjustment after a huge initial foreign investment. While longer-term investors are still set to benefit over the next five to 10 years, as low-cost property continues to attract holiday home-buyers, there are no longer instant returns to be made. «An oversupply of rental properties is being aggravated by stories of dishonest local management agencies, some of which are reported to be letting properties and keeping the cash.»