Bulgarian Property – Market Update 26 Jan 2006

Bulgarian Real Estate – The Growth Continues

Figures from the National Statistical Institute indicated that the average prices of flats in the Regional capitals of Bulgaria have shown a rise of over 36% in 2005.

The prices of flats in the capital of Sofia saw the highest rise of 20.2% with prices averaging 1,222.4 leva/sqm. The highest percentage of growth was registered in Vratsa, where the prices of flats rose by an astounding 86.1% and prices are at 464.8 leva/sqm.

Other areas of growth for the same period include:

Yambol up 72.1 per cent to 513.6 leva/sqm
Silistra up 70.1 per cent to 406.5 leva/sqm
Varna up 25.6% to 1,198.1 leva/sqm
Bourgas up 46.2% to 1,126.5 leva/sqm

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Sofia Olympic Bid Gathers Momentum

In a move which signals the determination to put Bulgaria on the tourist map and commit to major infrastructure improvements, the government has confirmed its support for the Bulgarian capital to host the 2014 Winter Olympics.

"We should be aware that the road ahead is long and difficult. Achieving the aim will be good not just for the development of the Olympic ideal, but for the development of winter sports and
winter tourism in Bulgaria as a top priority of the economy as well," Prime Minister Sergei Stanishev said.

The first stage in the process concludes in June 2006 when the number of competing cities is narrowed down to four. These cities will then continue the bidding process right up until June 2007 when the winning city is named.

Major highway projects will be given priority as the State and Sofia Municipality, along with the Bulgarian business community work together to ensure the best possible outcome of their bid. Winter tourism will also greatly benefit as a result of a successful bid.

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EU Integration

This week saw the arrival of European Commission Vice President Franco Frattini in Bulgaria. Frattini met with the Prime minister and many other government ministers along with Justice Minister Petkanov and senior judiciary members.

Items up for discussion included judicial reform, the suppression of human trafficking, corruption and the strengthening of the future EU external borders. All are seen as areas of concern and part of the EU accession process, with EU membership expected in 2007.

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Brits Invest and Holiday in Bulgaria in Record Numbers

The British have been heading to Bulgaria in record numbers. The country is not only proving more and more popular as a destination for British holiday makers but many are also buying investment properties and holiday homes in the country.

James Knight, Managing Director of leading property specialist Knight International (http://www.knight-intl.com), has predicted that 1.2 million British tourists will probably choose to visit Bulgaria for a holiday in 2008.

In 2002 there were 100,000 Brits travelling to Bulgaria for a holiday. This number has risen heavily each year and was up to 400,000 for last year, 2005.

Knight cites that Brits now know a lot more about Bulgaria and the country is now seen as been within their “comfort zone” for holiday destinations, along with other countries such as Italy, France and Spain.

The cost of a holiday is also vastly less than that of a similar holiday in France or Spain due to the lower cost of living. There is also an impetus on the expansion work been carried out at airports such as Burgas and Varna to allow the passage of an increasing number of tourists. Low-cost airlines are also doing their bit with more flights than ever in and out of the country. The completion of construction work at the airports will open the market to more low-cost carriers resulting in greater competition, lower prices and improved flexibility for the traveller.

On the property front, the number of Brits buying second homes in Bulgaria has risen 77% in 2005. Alex Wright, director of British Consultancy Company HIFX comments "Although France and Spain remain the most popular destinations to buy abroad, due to their proximity and the cheap price of travel; British citizens are starting to look further a field,"

He adds "Bulgaria also is booming and the Black Sea resorts are reminiscent of Spain 20 years ago; investors are buying in their droves and there is similar activity in some of the ski resorts.

While Spain accounts for 35% Brits homes overseas and France accounting for 24%, interest in second homes in these countries is declining and the going to other countries such as Dubai and Bulgaria where buyers can get more for their money.