Bulgarian Property

Bulgaria joined the EU in January 2007. Now is the time to invest in Bulgaria to see maximum returns during the next 3 to 10 years. GDP is growing at more than 6% per annum and set to continue this trend. Tourism increased by 5 % in the 1st half of 2006 increasing to 2.8 million tourists, the UK tourists increased by over 20 %.

Market surveys show that more than 2 million Brits plan to buy properties abroad. Bulgaria is popular in the UK and Bulgaria will attract a large number of buyers, because they get value for money compared to what buyers can get in Spain, North of Italy, France, etc. Buyers from Northern Europe, the Middle East, Greece, Russia, Poland and Turkey buy also properties on the Black Sea coast in increasing numbers – it is truly an international property market. Experts project that the number of tourists and holiday house owners will exceed more than 15 million in a few years time. 6 billion EUR is to be spent on infrastructure with an additional 2 billion EUR on motorways, 720 km of new roads are planned. World leading companies, such as Microsoft, Google, Hewlett Packard and Deutsche Bank are now setting up in Bulgaria to capitalize from the high growth rates. Unemployment is less than 8.7% and tumbling from 10.77% in Aug 05, this trend is set to continue. Inflation is under control. Corporate tax is only 15% pr. year. EU companies with more than 20% of the shares in LTD companies avoid withholding tax of 15%.

The negative aspects relate primarily to infrastructure problems. Airports, roads and utilities are not developed to fully support the growth and dynamics of the private sector. The doctors are well educated but the hospitals and the poor service levels of most banks need to reach a higher level. The government, the courts and the regional municipalities as well as banks operate in a bureaucratic and slow way. This is due to lack of competence and experience with the Rule of Law and good public service. The Bulgarians are learning fast, becoming a part of the democratic market economy of the EU, and we are convinced that they will overcome these remissness post-socialist problems after some years if the required political reforms are forced by the EU to be implemented. The doctors and dentists in Bulgaria are well trained, but investments in state-of-the health care system and facilities are needed in the whole country.

All in all the economic future looks bright for Bulgaria and this will continue to boost the property market from low levels to near levels of the South of Europe.

	Spain	South of France	Croatia	Bulgaria
Villas with sea view	4.000	5.000	1.300	1.100
Apartments with sea view	3.000	3.800	1.800	1.200
Zoned plots for villas with a sea view	300-	400-	180	50-120
Zoned plots for apartments with sea view	300-3000	300-3000	200	100-500
Non-zoned land plots for villas with a sea view.	200	155	80	40-80
10 km radius from gondola	400-800	400-800	50	25

The table was made using conservative estimates. Regionally and locally there can be huge differences. Some may say that this table is not projecting the accurate market situation. We still choose to publish it, because it gives the reader a general understanding of the growth potential of the Bulgarian property market. In Spain it can be extremely difficult and expensive to get a permission to construct. In Bulgaria, this is typically something that happens fast and the costs are relatively low. Villa plots in Spain and South of France can be priceless if they are situated at prime locations - they can not be placed in this table at all. It is a precondition that the plots on the table are well situated with easy access to airport, beaches etc. All prices are collected from certified brokers in the countries mentioned.

The Supervisory Council of Bulgaria's cigarette monopoly Bulgartabac Holding decided Monday to sell its two plants in the southern cities of Plovdiv and Stara Zagora at the Sofia Stock Exchange.

The state-owned company decide at the beginning of 2008 to restructure by closing down the two factories and concentrating all of its production operations in its other two plans located in Sofia and Blagoevgrad.

The Plovdiv and Stara Zagora plants will be offered for sale together with their unlimited permits for the production of tobacco products but without licenses for specific cigarette brand but without licenses for specific cigarette brands.

The concrete characteristics of the sale, i.e. the minimum prices of the shares on sale, and the exact dates, will be determined in the beginning of June.

The company management announced that in order to guarantee the maximum transparency of the sale process, it would organize a virtual information hall with subsections for the different plants.

The potential investors will be able to ask questions and receive answers online, all of which will be made publicly available. The investors will also be able to visit the factories on sale in person.

The virtual information hall will function until the sale process through the Sofia Stock Exchange is completed.

The only wind energy generators station in Bulgarian located close to the Kaliakra Black Sea Cape, which is a popular tourist destination, is currently undergoing a three-day testing.

The 36 wind energy generators in the Kavarna Municipality have a total electricity producing capacity of 35 MW, which according to German E.ON company owning the facilities, is not enough to power even a town like Kavarna with a population of 12 000, ndt1.com reported.

Some 80 more wind power generators have been installed in Bulgaria's northeast Dobrich District, and the other planned investments are expected to bring to the total capacity to 600-700 MW, according to Bulgaria's National Electric Company NEK.

Because of the planned investments, NEK is also planning to build two additional electricity transfer lines in the region.

The most attractive places for the creation of wind power generating stations are the municipalities of Dobrich, Shabla, Kavarna, and Balchik in northeast Bulgaria, and Sliven, Aytos, and Yambol in the southeast part of the country.

New Zealand Investors Interested in Village in Bulgaria Rhodope Mountains

Investors from New Zealand have visited several times the Poprelkata village in the Rhodope Mountains, Smolyan District, with interest in the purchase of old Rhodope style houses.

The bad condition of the only road to the village, however, as well as the hardships in finding the heirs to the abandoned houses, who are scattered around Bulgaria, have prevented the New Zealand representatives from making any purchases yet, plovdiv24.com reported.

Greek firms are also interested in acquiring property in Poprelkata but have also demanded that the road be repaired.

Poprelkata has about 10-12 elderly residents, who make their living by raising cows and sheep. The local people are sure, however, that rural tourism would have a great future in their village because of the nature beauties and the many unexplored Roman archeological objects, which would also provide basis for the development of cultural tourism.

Several caves and the Garga Dere Canyon are located close to the village as is the grave of the heroine from the legendary Bulgarian folk song "Rufinka Bolna Legnala".

NGO Disputes Bulgarian Projects Approved for EU Funding

25 February 2008, Monday

The garbage disposal management of Bulgaria's capital is one of the six Bulgarian EU-funded projects disputed by Friends of the Earth - Europe. Photo by Yuliana Nikolova (Sofia Photo Agency)
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Fifty EU-funded infrastructure projects for Eastern Europe were disputed Monday because of their environmental consequences.

This happened in Brussels at a press conference of the Friends of the Earth (FoE)- Europe organization. According to FoE, the projects in question were detrimental to the environment, and the billions of euros for them would be spend in vain.

The fifty disputed Eastern European projects are worth EUR 10 B in total, and the six Bulgarian projects of these are worth some EUR 5 B.

The disputed infrastructure projects for Bulgaria include the Lyulin Motorway, Sofia Municipality's garbage disposal management, the expansion of Sofia Airport, and the construction of Bulgaria's second nuclear power plant at the town of Belene.

The Bulgarian members of FoE - Europe declared Bulgarian projects were often flawed which caused long delays in their approval and execution.

With respect to the garbage disposal system of Bulgaria's capital, they said the problem with finding a new dumpsite had to be resolved, and that more attention should be paid to recycling.

Bulgaria Foreign Minister Opens Forum on National Symbols

25 February 2008, Monday

Bulgaria's Foreign Minister Ivailo Kalfin opened Monday a round table as part of the campaign to choose Bulgaria's national symbols. Photo by Nadya Kotseva (Sofia Photo Agency)
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Bulgaria Deputy PM and Foreign Minister Ivailo Kalfin opened Monday a round table as part of the "Bulgarian Symbols" National Campaign.

The themes of the forum, which took place in Grand Hotel Sofia, were: "The Bulgarian Symbols in Support Our Identity and as Bulgaria's Emblem Abroad", and "Bulgaria - Successful European Business and Tourist Destination."

The participants at the forum were also welcomed by Bulgaria's Deputy PM and Minister of Education Daniel Valchev, and by Deputy Minister of Culture Yavor Milushev.

The "Bulgarian Symbols" National Campaign will go on until the end of April, 2008. Bulgarians will choose one "global" symbol of Bulgaria among 33 nominations.

In addition, one symbol will be chosen in each of the three categories: natural sights, cultural-historical heritage, and food and drinks. The nominations include the Cyrillic alphabet, the Boyana Church, the Old Town in Nessebar, the Bulgarian Rose and rose oil, the Seven Rila Lakes, yogurt, beans soup, the Bulgarian Martenitsa.

Over 100 000 Bulgarians have already voted for Bulgarian symbols at the website of the campaign, infobulgaria.info.

Bulgarian Foreign Minister Kalfin stressed during the forum that Bulgaria has plenty of features, which would be attractive for foreign business and tourists.

He reminded that 74% of foreign tourists in Bulgaria, or 3,4 million people, are from the EU members states, and that it depended on their image of Bulgaria how many new tourists it would welcome next year.

"It seems that we are still unable to acquire the confidence of a nation from the European family", Kalfin said, adding that in his view Bulgaria's symbol should be representative of the country.

Archeologists from Bulgaria's National Archaeological Museum present at the forum commented that foreign tourists were most interested in the gold treasures and the 1,1 million years old bone and rock graphics from the Kozarnika Cave close to the town of Belogradchik in Northwest Bulgaria.

The Bulgarian Symbols National Campaign was started by in August by the Bulgarian Association for Business and Tourist Information.

By Novinite.Com

Yet another research has pointed Bulgaria as the country with the world’s strongest house price growth last year amidst a global cooling of the property market. The study carried out by Global Property Guide (GPG) said Bulgaria saw the world’s strongest house price growth at 30.6% (15.4% in real terms) to end-Q3 2007 from a year earlier.

Shanghai came in second, despite efforts by the Beijing government to cool the market. House prices there rose by 27,85 percent in 2007. The survey, which provides information for potential property investors, says that while the housing market gained momentum in the Asia-Pacific region, it slowed in Europe and “crashed” in the US.

In Europe most countries registered non-impressive y-o-y house price changes in 2007, except Norway and Estonia, shows the survey.

Ireland’s house price plunge continued, with a 4.68% y-o-y drop to October 2007. When adjusted for inflation, the drop is more pronounced at 9.1%. The Irish housing market is vulnerable to interest rate changes, as 85% of mortgages are with variable rate, GPG comments.

The Baltics performed quite well in terms of house price changes from a year earlier, but the latest quarterly data presents a picture of a region whose housing markets are in trouble.

In Latvia apartment prices have dropped by 7.7% to September 2007, over a quarter earlier. Lithuania’s apartment prices have stagnated at LTL 12,500 per sq. m. in the last two quarters. In Estonia quarterly house prices increased by 23.4% y-o-y to Q3 2007, lower than the 28.6% growth to end-2006.

Norway’s housing markets are showing signs of nervousness, despite a strong performance this year. The house price index for the entire country increased 11.6% y-o-y to Q3 2007 (11.9% in real terms due to slight deflation). However, prices in the metropolitan area of Oslo-Baerum fell 0.5% from Q2 to Q3 2007.

Spain recorded 5.31% y-o-y house price growth to Q3 2007, the lowest rate of increase in nine years. Higher interest rates have dampened demand, and banks have become very careful in granting housing loans.

A slow down was also evident in the UK, though less sharp than expected. British house prices increased 9.7% y-o-y to Q3 2007, less than 2006’s y-o-y increase of 10.5%. When adjusted for inflation, the house price increase in Q3 2007 was 7.5%, slightly higher than the 7.3% rise in 2006.

House prices in Italy and Greece have also cooled. Mortgages in these markets are predominantly based on variable interest rates.

Although mortgages in Denmark, France and Germany are mostly based on fixed interest rates, their housing markets have nevertheless cooled. Other European countries which experienced house price slow downs are Sweden, Poland, Finland, Netherlandsand Switzerland. France has increased tax deductions on mortgage-loan interest rates, a measure expected to hold housing demand firm.

NEWS

Bulgaria Named World’s Strongest House Price Riser