Economy

The property Market in Bulgaria has shown sustainable growth. The Market is a highly plausible winning investment. The increased foreign direct and indirect investment in Bulgarian real estate is determined by EU accession in January 2007, Bulgarian membership in NATO, growing economy with currency tied to EURO, and the expanding tourist industry. Bulgaria has stable macroeconomic indicators and very attractive return on investment rates in the real estate sector. On average 20% per annum. Bulgaria’s property prices are predicted to rise sharply to begin to converge with European averages.

The recent Red Guide to Buying in Eastern Europe describes Bulgaria’s economy as follows: A boom is too weak a word to describe the phenomenal rise in property prices taking place in Bulgaria’s tourist area. Across the board, capital growth in the tourist industry is estimated at around 35%. Four or five years ago, the Bulgarian property market did not exist in terms understood by capitalist economy. It was not attractive to a western investor but now it is one of the hottest investment spots in Europe.

Bulgaria is only being discovered since communism collapsed in 1989 and Bulgaria has subsequently opened itself to the West.

Its new found popularity is due to its beautiful nature, fantastic sunny beaches, clear skies and Mediterranean style but low cost of living.

Bulgaria underwent an economic crisis in 1997 and since then the government has really put its house in order. The national currency, the Lev, is now linked to the Euro and successive governments have achieved economic stability with a significant number of economic reforms. The consequence is that Bulgaria is considered to be both a safe and attractive investment destination.

Bulgaria is often described as the ‘New Spain’, this means that the mountain and sea resorts are often the same investment potential as the Spanish property did fifteen years ago. Many people can no longer afford to buy property in Spain, France and Italy and Bulgaria offers both an attractive option for the investor and also for those looking to afford a holiday, holiday home for themselves. Foreign investors are currently flocking to Bulgaria’s Black Sea coast and ski resorts. The British make up 60% of this total followed by Germans, Russians, Scandinavians and the Irish.

In 2004, the number of British tourists rose by 6.3% to 239,000 and German tourists rose by 5.7% to 535,000 and for the first time Bulgaria entered the top ten tourist destinations world wide for the UK market.

Bulgaria’s rising property prices have been greatly influenced by the European Union. Bulgaria joined NATO in 2004. Already millions of Euro have been pouring into Bulgaria with various programmes to improve the infrastructure and prepare for imminent EU accession. This is very obvious in infrastructure such as roads. Two excellent highways travel through the North and South of the country, East to West. The money spent through these programmes have stimulated the tourist sector and have had a huge positive effect on the Bulgarian economy which has contributed greatly to the reasons why property prices are rising at such a fast rate. Private investors have also invested millions of dollars.

The World Tourist Organisation placed Bulgaria near the top in terms of tourism growth. In 2003, growth increased by 23% compared to 2002. European Union tourists grew by 25% to 1.6 million in 2003 and this has increased significantly in 2004. Bulgaria is also regaining popularity with Eastern Europeans and the Russian tourist figures have risen by 22%. Bulgaria is a former communist country but is now governed under parliamentary democracy. The head of state is the president of the republic and a vice president, are elected every five years. Annual inflation is currently at 3.8% and the country enjoys one of the highest economic growth rates in Europe at 4.5%.

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