Serious property investors are now choosing not to invest in Bulgaria as the property market in this country is now saturated and property prices are expected to start decreasing soon as the property bubble has burst, local real estate advisor Alyona Frendo warns.

Experts are advising Maltese property investors not to continue with the dangerous trend of purchasing land and property in Bulgaria as investors may start losing money as from this year.

The main problem with Bulgaria is that everyone is building even with permission from Bulgaria’s permit authority and the Bulgarian Government announced that it will start tracking such illegal constructions and property. The authorities in Bulgaria are estimating that around 25 per cent of all property in Bulgaria is actually built without permit.

“When buying in another country, most people never do much more research than what is given to them from the investment company. This is a dangerous habit. Everyone between the potential buyer and the property is just a salesperson, and they all get paid on making sales.” said Alyona Frendo a local international property advisor.

Foreign citizens and companies have spent a total of 310 million euro in acquiring real estate in Bulgaria during the first three months of 2007.

Bulgarian National Bank data published on May 29 shows that the 310 million euro is an increase of 63 per cent compared with the same period in 2006 when foreigners spent a total of 190 million euro in Bulgaria’s property market. Proof of the impact that the real estate sector has on the Bulgarian economy is that the money spent on real estate accounted for close to 40 per cent of all foreign direct investment in Bulgaria in January-March 2007.

Bulgaria has also been criticised for focusing on the development of property at the expense of infrastructure projects, such as those for transportation.

The Bulgarian participation was not only numerically the strongest of all foreign countries at Domexpo. In the four days of the exhibition, visitors were virtually queuing at the Bulgarian booths to inquire about the offers and the conditions for acquiring property in Bulgaria.

Bulgaria seems to have stolen the attention of Russia’s wealthy, including from traditional destinations such as Spain and Cyprus.

This is hardly surprising, given the real estate boom in 2006. The supply side is there, it remains to be seen if demand will continue to be strong.

• Bulgaria and Romania would register the highest growth in newly build retail property by the end of 2007, a real estate company Cushman & Wakefield report said.
• The retail property growth would reach 150 per cent by 2007, the report said as quoted by the Romanian English language daily Nine O’clock.
• Trade centres covering a total area of 98 000 sq m will be built in Bulgaria by the end of 2007.
• Once Romania enters the European Union, it will become the second biggest retail property market in Central and Eastern Europe after Poland.
• Romania plans to construct trade centres of total area of 560 000 sq m.
• The countries from Central and Eastern Europe would register the highest growth in retail property supply, the report said.

Historical houses, in some cases over 200 years old, are looking for buyers as well. Calling it your Bansko home might not be as straight-forward as buying an apartment though.

In most cases, these properties are not actively on the market and are in a sorry state. The owners have passed away and the people who inhereted them don’t care much about the property itself. They are still interested in selling the plot itself (often at bargain prices).

There are a few of these houses nearby Bansko as well, in a small town called Dobrinishte. Dobrinishte is a spa and thermal center with 17 mineral springs. The temperatures of the springs range from 33?? to 45??.

Balkanstroy, the local construction company, will build a ski and golf complex near Bansko, South-western Bulgaria, said the InvestBulgaria Agency which is due to issue a First Class Investor certificate to the project. The 240 mln lev complex, located in the Kulinoto area, should be ready in 3 years.

Balkanstroy will built 20 km of ski lifts and 60 km of runs with a daily capacity of 6,500 skiers. The complex will have a total of 3,000 beds.
The golf component of the year-round complex will feature a golf course, clubhouse, hotel and retail facilities.

The new golf courses announced are part of the plan to turn Bansko in a all-seasons resort (complete with spas, horse racing, mountain biking, etc.).

Hopefully this will change the image of Bansko as a ski resort for yuppies (e.g. people working in Bulgaria’s IT outsourcing industry).

Investment in British property offered higher return rates and lower risk than a similar deal concluded in Bulgaria.

In the past months the situation in Bulgaria began to change. The annual credit growth decreased significantly from 36 per cent in 2005 to 13.9 per cent in September 2006.

Prices of property located in attractive regions, like Bansko winter resort, decreased during the second quarter of 2006, agents said.

Over-supply furthered competition between property owners, which also affected prices. Bulgaria’s rapidly developing tourism sector could not cope with this over-supply, Assetz analysts said.

Personally, I haven’t noticed a drop in prices for Bansko homes. At least when it comes for development projects. Prices for appartments and studios fluctuate quite a bit so it’s more difficult to identify a trend.

Bulgaria will join the European Union on Jan 1, 2007, and is on the verge of becoming the Riviera on the Balkans. The improved economic conditions, political and social stability in Bulgaria over the last 3 years have culminated in a real boom of the prices of property in Bulgaria.

Other important factor for the rising property market is the huge tourism potential in the country. Incredibly, Bulgaria is now the third most popular holiday destination after Spain and France for British holidaymakers.

There isn’t anything new in the review, the property market statistics have indicated a similar trend.

The other popular holiday spot for UK buyers is Bansko and the neighboring area. All in all, over 768 Million euro have been invested in real estate according to the agency. Maybe, as prices grow, alternative solutions might spring up, like home share.

The current favorite is Austria’s bid - Salzburg. In a couple of days, IOC is expected to select the initial short list of 2014 candidates. Hopefully Sofia will be among them. In the unlikely event that Sofia wins the bid, property prices in the ski resorts are expected to soar as millions of euros will go into infrastructure projects.

While Spain and such baked in temperatures of 37 degrees, Bulgaria was a pleasant mid-to-late 20s, so one could move around without fear of heat stroke and that propelled us into moving off our loungers and going into Varna to potter and get some culture in.

Bulgaria is not retail/spa posh in the way we in Ireland have become used to, but it is lovely and decent and rich in other ways. I want to go back and explore much more.

In terms of package holidays, Bulgaria is a great value - even better than Morocco. Go there now while it is still a bargain, because in 2007 Bulgaria is to due to enter the European Union, and those of us already living in high-priced euro land know you can kiss goodbye to it being a good-value haven.

We went only for a week but my eight-year-old son and I wish we could have stayed longer. No English language TV and we still hadn’t managed to get bored. Amazing.