Bulgaria property investments with record growth for 2007

Bulgaria property investment has proven to be the country's economic driver with a record-breaking turnover of €11.36 billion in 2007.

As the world's strongest property market in 2007, Bulgaria property investment has made a huge €2.36 billion increase on 2006 figures, and is successfully keeping up the momentum for 2008.

Many local and international property experts predicted the year's increase to reach 25% to 30% however by September the market had actually risen by 32% with many major cities, such as Sofia, already recorded impressive growth this year.

The huge property price rise has been largely attributed to a good mortgage market, high annual revenue of properties and the weak impact of the world financial crisis in Bulgaria. The Bulgarian financial market has not been impacted by US sub-prime crisis due to no cross-border banking, with consumer borrowing continuing at a steady growth rate.

UK property investors, who accounted for 40% of all Bulgaria property investment in 2007, followed closely by Russia occupying 38% of the market have played a primary role in maintaining excellent market conditions, whilst further strengthening the country's financial stability and adding to the robust appeal for Bulgaria property investment.

Nikolin Gavrailov President of the Bulgarian Entrepreneurial Chamber in Building reported the turnover for the construction industry as €5.6 million adding, "The (previous) lack of modern apartments, retail, and administrative buildings caused the construction boom. The investment growth in tourism, production, and the need for modern infrastructure also stimulated construction. Construction sector growth is expected to be between 12% and 16% year on year until 2010."

Alongside such strong growth in Bulgaria property investment, the economy has experienced sustained growth with The Economist forecasting a consistent 6.4% GDP growth year on year. Bulgarian emigrant workers are investing back into the country in particular retail and housing sectors, also boosting the Bulgarian economy.

According to preliminary figures from the World Bank, remittances from Bulgarians working abroad will amount to €1.26 billion in 2007. However, the Bulgarian National Bank have stated the actual figure to be closer to €2 billion or 7% of the gross domestic product.

In a bid to ensure a consistent flow of foreign direct investment (FDI), the Bulgarian government has made bold changes to the Bulgarian tax system. The new system will mean that both income and corporate tax will be charged at a very low 10%. This new flat rate applies to all workers, investors, and companies regardless of income or profit values, making Bulgaria a very tax efficient place to relocate or invest in.

From July 2008, budget airline Wizz Air will be the first operator to offer cheap internal travel from the capital city to the coast of Bulgaria. The low cost airline will operate four domestic flights per week between Sofia and Varna, and will expand flight frequency to the UK, Italy, Germany Spain, and Turkey.

Despite such rapid price growth, Bulgarian property investment remains very competitive and highly profitable in comparison with other European markets, giving the country a long-term profitable investment edge.

Information by : Obelisk

Sofia starts work on Big Air snowboard World Cup event for Christmas

Sofia's city hall began working on the ramp for next week's Big Air snowboard World Cup event in the downtown of the Bulgarian capital.

The ramp in the Battenberg Square in Sofia downtown will be 100 by 32 by 20 meters and will weigh 600 tonnes, together with the snow, when complete.

The location of the event has heated spirits in Sofia, with councillors from two rightist parties asking that the event be moved to another location, where it would not disrupt traffic on one of the city's key boulevards.

Despite the city hall dismissed the fears of more congestion in the city, saying construction works will not have a major impact on traffic through downtown, nor can it move the timing of the event, scheduled for December 22.

"We can't move the event, so it is not around Christmas, as politicians have asked us. The international calendar of events has been announced long ago and we have to stick to it," the chairman of Bulgaria's ski federation Tseko Minev said.
"The TV time for it has been booked already. It's an honour for us to be the host of such an event, together with such big European capitals as Moscow, Berlin or Copenhagen," he added.
The snowboard lovers will be entertained in Sofia for live show or they could see the show on BNT.
Source ; www.novinite.com

Risks for the owners of properties in Bulgaria

Dozens of people become victim of the so called real estate mafia in Bulgaria every year, losing their properties in their desperate need to get money cash as soon as possible. But the results are shocking - the owners pawn flats or houses, whose value is set at hundreds of thousands Euro to receive some half of this sum immediately. Besides such "services" are at a high rate of interests.

Of course, everybody, who takes such a risk, hopes he is to get his property back right after he pays off his debts. But often that is not the case... At least not in Bulgaria...

Police probes proved that some owners of pawnbroker's have up to 15 properties registered in their names. Contracts however show that these flats have actually been pawned and according to the law they should not be transferred to the "brokers".

Suspicious foreign jobbing-houses, taxi drivers, change bureaus or Bulgarian nationals, who work abroad often play the roles of such "brokers". They even use forged documents to sell to ordinary people mortgaged properties.

Only 500 out of about 1400 jobbing-houses are legally working. The rest perform such activities without paying any taxes or insurances to their employees.

In most of the cases, police authorities and prosecutors could do nothing to help the situation when a fraud is uncovered as the cheats enforce their rights through misleading contracts, signed by the victims themselves. There follow endless lawsuits, which take no effect. Meanwhile the properties are sold to one or more other buyers.

The scheme that works flawlessly on this "market" is as follows: a cheat takes on a flat in a big residential building in the capital city of Sofia and pays in advance the rent for the next few months without signing a contract, which contains his personal data. In a while, an advertisement is published in the press, saying the flat concerned is for sale as the price is extremely low. The sell of course is to be carried out without the help of an estate agent. The false "owner" receives 10% of the property's value as a deposit from each of the candidate-buyers and nobody is able to find him anymore.

The other way of committing such frauds is to take on a real estate property, prepay the rent for the following few months without signing any official papers, taking the notarial act from the owner, making a copy, which is later used for "letting out" the house to other people.

Every year Bulgarian authorities are being tipped off on more than 20 cases of frauds related to sales and purchases of real estate properties, Economy police Inspector Gratsiela Petrunova announced recently.

"There are several organized rings that commit such crimes in the country," the official added.

Economy police experts found out that notaries are often involved in such crime schemes.

The criminals usually get the personal data of the potential victims in advance, authorities reported.
by "Darik Radio", Nikolay Hristov

Property market developments in Bbulgaria unpredictable in first half of 2007

Predictions made for property market developments in the first half of the year failed coming true. The market saw dynamic developments and turned to be one of the fastest evolving segments. Price hike went beyond expectations, making agents unable to predict future growth. In the first half of the year, one and two-bedroom apartments registered the biggest price increase. The growth, however, is specific for each district and average estimations cannot be made. New construction is responsible for the varying trends, especially in Sofia. If a district sees a number of new two-bedroom apartments, owners of older such property try to sell it at prices similar to the ones for newly built apartments. Bulgaria’s bigger cities saw residential property price increase of seven to eight per cent. In general, property located close to the city’s centre gained more in value.

Information Source: Sofia Echo

Polish company to invest 90milion leva in mall construction in Bulgaria's Varna

Polish company Globe Trade Centre (GTC) will provide funding for nearly 95 per cent of the construction of Gallery Varna mall.
Investment will total 89 million leva.
This is the fourth mall project to be launched in the coastal city of Varna since the beginning of 2007.
The project is still awaiting construction permit. Construction works will be finalised by the end of 2009.
Annual rental income is expected to reach 9.5 million leva.
This is the first GTC project in Bulgaria. The company already has several trade centres in Romania. It plans to construct two more trade centres in other big Bulgarian cities.
GTC announced that in 2006, it acquired a 4500 sq m plot in Sofia, worth 1.55 million euro.

Information Source: Sofia Echo

Industrial property market in Bulgaria underdeveloped - report

Industrial property market in Bulgaria is poorly developed as property supply meets 60 per cent of demand.
Most warehouses, production facilities and logistics centres offered on the market are old and in bad condition while prices fail complying with market criteria, Pari daily reported.
Monthly warehouse rent in Sofia vary between 3.5 euro and 4.5 euro per sq m and sales prices between 450 euro and 500 euro per sq m.
The report said that a good opportunity for long-term renting is municipal property due to low prices. Such properties require sufficient amount of initial investment in repair works and reconstruction as the buildings are usually old and in bad condition.

Information Source: Sofia Echo

Bulgaria maintauns leading position in property market attractiveness ranking

Bulgaria's capital of Sofia ranks third in property market attractiveness according to recent research of Global Property Guide (GPG).

The ranking included 12 European capitals and placed Bratislava and Istanbul at the first two positions.

GPG compared several factors including prices per sq m, annual rental income, taxes, transaction costs, GDP and legislation in the country.

EU membership requirements activated a number of reforms in Bulgaria, research said. The annual gross rental income in Sofia is 10.6 per cent on average.

Average residential prices are still low amounting to 1042 euro per sq m and the taxes on rental income are within the European levels.

Transaction costs remain too high with average levels between 24.8 per cent and 26.6 per cent.

Slovakia turns out to be the most attractive place for property investment due to its GDP growth of 8.7 per cent in 2006, high rental income and low transaction costs.

Legislation changes in Turkey in the end of 2005 made it easier to purchase real estate in the country. Rental income ranging between six and 7.6 per cent and steady economic growth placed Turkey second among most attractive places for property investment.

The ranking goes further to include Romania, Hungary, Moldova and Ukraine.

In comparison, Baltic countries registered rental income decrease. Apartment prices in those countries are already reaching the levels in Copenhagen, Helsinki and Stockholm.

Information Source: Sofia Echo

Prices of new apartments in Bulgaria's Bourgas Decrease, hike registered in Sofia

Average prices of new apartments in some regions of Bulgaria’s coastal town of Bourgas went down in May.
Apartment prices in the centre of Bourgas decreased by four per cent to 1050 euro per sq m and by six per cent in the regions near the centre compared to April figures.
Prices in the regions near Bourgas remained unchanged. Prices in Sarafovo varied between 700 and 750 euro per sq m, in Sozopol , 1100 euro per sq m , Primorsko registered price of 850 euro per sq m.
Varna registered no changes in its apartment prices. Apartments in the centre of Varna vary in price from 1000 to 1300 euro per sq m.
New panel and brick construction in Sofia became more expensive. Average prices went up by 1.63 per cent compared to April costs. Some residential district in Sofia showed no change in prices.
Beli Brezi, Mladost 1A and Geo Milev feature among residential districts that registered the highest price increase in May.
The average apartment price in the centre of Sofia increased by 1.94 per cent reaching 1050 euro per sq m.

Source : Sofia Echo