Confidence Returning to Bulgaria's Property Market
Property consultants Cushman & Wakefield reported a record year for foreign investment in Bulgaria last year with real estate sales contributing ?239 to the economy, predicting a continued rising demand throughout 2015.
After prolonged economic hardship following the global financial crisis, Bulgaria's property market remains at a huge discount to peak 2007 prices, attracting wealthy foreign investors with opportunities to acquire land and property at rock-bottom prices.
Polina Stoykova, managing director of Bulgarian Properties said: "An important element of the new market reality is the return of confidence in the property market. More and more buyers are thinking of buying property because real estate is a safe real asset and good investment. This understanding coincided with a very favourable moment in the property market development because real estate prices are currently at levels from ten years ago and respectively, the properties are much more affordable. We could also add to the picture the improved mortgage conditions now offered by the banks".
Apart from price, another dynamic property investors are interested in is tourism. Most foreign investors seek to take advantage of resort properties with excellent occupancy rates that ensure consistent rental revenue streams in a growing market. Bulgaria has risen through the ranks as one of Europe's most popular alpine resorts, offering exceptional value for family ski holidays and with plenty of breathtaking beaches the country has a whole lot more on offer besides.
Bulgaria enjoyed an extremely successful winter season that saw more than 80,000 visitors to its alpine resorts, boosting the nation's economy by ?17.5m. According to the country's tourism minister Nikolina Angelkova, the number of visitors from Turkey increased by almost 30% as a result of the simplification of visa requirements while German tourists increased by around 17%.
At the beginning of August, budget flight operators Ryanair issued a press release that is set to boost Bulgaria's tourism and real estate sectors moving forward into 2016. The airline's Robin Kiely said: "Ryanair is pleased to announce a new daily London Stansted to Sofia route beginning May 2016 which will go on sale onwww.ryanair.com in September. Sofia is another key capital city airport and our second in Bulgaria as we continue to grow Europe's largest route network, with more routes and flights and improved schedules".
Property prices in Bulgaria have also been buoyed by weak supply due to limited construction. This has impacted markets in the country's large cities and resort areas the most and with off-plan investment opportunities thin on the ground, prices look set to continue rising.
As a direct result of Bulgaria's fantastic winter season and the financial injection to its economy, property prices are forecast to stabilise as the economic recovery is consolidated. Modest price growth in both commercial and residential property sectors is expected throughout the year, matched by stable economic growth that will underpin investment in Bulgaria.
According to a report by real estate researchers Colliers International , foreign investors are expected to steadily increase their exposure in Bulgaria's commercial property market throughout 2014, depending on the availability of product for sale. Investor returns will continue to be driven by rental upside, discounts on existing debt and lower interest rates and strong income generating assets in Bulgaria's commercial occupational markets will continue to attract more investment capital.