Bulgaria. Property Surplus drops from 20,000 to 10,000

Borislav Petrov Managing Director of www.citymanagement.bg

Leading Sofia property agent www.citymanagement.bg has reported a huge drop in the number or properties available on the rental/resale market in Bulgaria. At the peak there was a reputed 20,000 properties available, however in just under 3 years this figure has halved!

Borislav Petrov Managing Director of www.citymanagement.bg said "This is quite a dramatic decline and offers huge encouragement to a market that felt the full force of the recession. With so many properties in Bulgaria bought for investment purposes when world confidence was at a high it was natural that there would be such a void in the event of a global recession. However Russian and Bulgarian investors have played a key role in capping this surplus and ultimately in bringing the figures down to where they are today. If this rate of investment continues and we fully expect it to, we feel confident that within 2/3 years we will be back on a level playing field and prices will start to increase once again."

It is interesting to note the changing dynamics of investors into Bulgaria. In the not too distant past Bulgaria was the favoured investment country of aspiring Western Europeans who were keen to take advantage of low build costs in this 'new' European country with the promise of strong equity increases; at least on paper. However the changing tides of global economies has altered this trend at least for the short term. Almost all properties that benefitted from a coastal location are now being snapped up by Russian buyers who are looking for holiday properties in a country that can offer a nice climate, good food, good transport links to and one in which the language does not differ too much from their mother tongue. Russian buyers are in a very strong position, compared to the West. They have not been hit hard by the recession and their saving ethos is that much stronger than the West. Many also pay far less in taxes and in some cases none at all.

Sofia on the other hand has benefitted mainly from Bulgarian buyers. Traditionally this is Bulgarians who are sourcing properties for their own needs and not for investment purposes. Locals are aware that the market is low at present and are using this window of opportunity to purchase a home at a favoured price. On a percentage basis it is calculated that 80% of property investments in Sofia at this time are from Bulgarians and 20% can be accredited to the Russians.

Borislav continues, "In some instances properties have dropped by 40 - 50% from their original purchase price; however in general most properties have suffered a loss of around 35%. When one looks at these figures it is easy to see why Bulgaria is proving popular once again for investors even if the geographical location of investors has altered from West to East.

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