Why Bulgaria is a Good Bet, Part 1

Property Secrets EUROPE, 2004-11-01

    Bulgaria is fast becoming one of the hot markets for British and Irish property investors, who are getting increasingly confident about the investment prospects in this East European country. 
    Two major events earlier this month have confirmed the trend. 
    The Southeast Europe Economic Forum, held in Sofia November 2-3, brought together experts and investors from all over the region. A panel session - Developments in the Real Estate and Construction Business in South East Europe - was attended by several British and Irish property consultants, agencies and investors who showed strong interest in the booming real estate sector in Bulgaria. 
    The launch of the Discover Bulgaria Club (DBC), which took place in London on Nov 10, gathered an audience of some 100 British and Bulgarian investors, estate agents, and tour operators, who have realised that tourism development has to work hand in hand with property development. The Bulgarian Business Links service of the DBC (still under construction at the time of the launch) is expected to become a major vehicle for discovering opportunities in real estate in Bulgaria. It will enable DBC members to find business contacts and to make direct exchanges through forums and interactive web-casts featuring specific subjects of interest.
At both events, investors and consultants agreed that Bulgaria is currently a hotspot, not merely as a tourist destination, but has also joined Spain, Portugal, Greece and Cyprus as a prime place for investors to buy property.
Why?
- Is Bulgaria becoming the new Spain for keen property hunters from Britain and Ireland?
- Is it going to be turned into the latest Costa del Sun? 
    Property prices in Spain, France and Italy have already taken off, so the Bulgarian Black Sea coast increasingly attracts investors hunting for lower prices and higher yields. 
    Bulgaria currently offers investors the opportunity to buy properties at some of the lowest prices in Europe, close to beautiful beaches or ski resorts, and benefits from the dual attractions of marvellous weather and a very low cost of living. 
    The Bulgarian economy is one of the most stable and quick developing of the Balkans, so investment opportunities exist in both the short and long term. 
    Some of the figures released at the events show more than 3.5 million tourists visited the country in 2003 - an 18 per cent growth on the previous year. When the figures for 2004 are compiled, they are expected to show a further increase of some 20 per cent. Real estate deals are expected to have increased by 14 per cent for the same period. 
    For the first half of this year alone, 216 million euros were invested by foreigners in Bulgarian property, compared with 98 million for the whole of 2003. That's what I call a booming sector! 
    One of the DBC corporate members, a London-based consultant who has promoted property in Spain for several years,is using his experience to help a new company, to promote Bulgarian real estate in the UK. 
    Mr Lane addressed both events and appealed to investors, developers, real estate agents and local authorities in Bulgaria to take note of the Spanish experience. 
    Mr Lane believes Bulgaria has much to learn from Spain about possible pitfalls that may undermine the value of property investment in the long term. Such pitfalls include the danger of ruining the unique qualities of the sea coast if it is overrun by developers, the need for tourism officials to work closely with property developers, and the difficulties foreigners have integrating with local communities. 
    According to him, some of the most important lessons for Bulgaria to learn include introducing strict planning controls to ensure that supply never outstrips demand, that the eco-environment is preserved, and that the build-quality of all structures is carefully supervised, ideally with municipalities being able to force developers to comply with planning regulations. 
    Currently legislation is being discussed by the Bulgarian authorities to conserve the country's coastline. It is expected to ensure a better balance between the natural and historical environment, and new construction.
Why are the British and Irish investing?
Mr Lane points out several main reasons: 
    Good investment potential - as we have seen, real estate prices went up by more than 20 per cent last year and are expected to increase by an average of 10 to 15 per cent annually for the next few years.

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