Free Resource - A guide to the Bulgaria Property Market

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Bulgarian property market

Like so many other members of Europe the Bulgarian property market was cut adrift in light of the 2008 US mortgage crisis. While the majority of investor focus fell upon the likes of Germany, France and the UK we saw Bulgaria and other smaller members of Europe pushed to the sidelines. Much of the froth which built up in the Bulgarian property market prior to the 2008 crash instantly disappeared and investors ran for the hills.

Overseas investment

There is no doubt that overseas investment will be a major element of the Bulgaria property market going forward. Recent years have shown an ever-increasing amount of overseas investment in Bulgaria reaching record highs. Bulgarian real estate prices are still at a significant discount to their 2007 peak with many overseas investors believing there is good long-term value. A return to 2007 levels will not happen overnight but there is certainly significant interest from outside of Bulgaria.

What is attracting property investors to Bulgaria?

Aside from the fact that property prices are still significantly discounted from their 2007 peak we also have an improving mortgage market not to mention the tourist industry. Bulgaria offers an array of Alpine tourist destinations as well as traditional beach holidays which attract many visitors from the likes of the UK. It was also interesting to see airline Ryanair introducing daily routes from London Stansted to Sofia which will begin in May 2016. It may have taken some time but Bulgaria is now seen as one of Europe’s more popular tourist destinations which can only be good news for the property market.

Bulgarian economy

Even though the Bulgarian economy has been showing signs of consolidation of late it is still invariably linked to the European economy. While 2015 economic growth came in at 3% it is difficult to see 2016 delivering a similar result.

The Bulgarian authorities decided to postpone membership of the euro until after the European crisis was over but the Bulgarian Lev is actually pegged to the euro - the country has in all but name adopted the currency. Whether or not we see any significant improvement in Bulgarian property prices in the short to medium term remains to be seen as the shadow of issues within the European Union continue to bear down.

Bulgarian property

Property experts fully expect foreign investors to increase their exposure across Bulgaria even during the challenging 12 months of 2016. A lack of available property is pushing rental values higher while relatively low interest rates allow for low-cost refinancing. There is a growing opinion that the Bulgarian commercial market offers extremely good value in the short, medium and longer term with strong income generating assets. It will be interesting to see the mix of overseas investment and domestic investors in the short to medium term especially when you bear in mind the troubled worldwide economy.

The future

There are certainly many elements of a successful property market already prominent in Bulgaria including a buoyant tourism sector, a relatively high rate of employment not to mention a shortage of property for sale. This together with increased overseas investment is likely to support the Bulgarian real estate market in the short term while the European situation is eventually sorted out.