The anticipation leading up to the entry of Bulgaria into the European Union in 2007, and the actual event, led to speculation by global real estate investors that Bulgaria would be a market producing excellent investment yields for years into the future. Bulgaria real estate markets thrived between 2003 and 2007. Well, the future is here, and things didn't quite work out as planned. Kicking in at about the same time, the global financial crisis painted a decidedly different picture for real estate markets in Bulgaria.
Real estate and financial services, along with construction, generated approximately 55% of Bulgaria's gross domestic product in 2006 and 2007. These sectors were substantial contributors to the country's annual economic growth of 6% during that period. With global financial problems came a dramatic slowdown in these sectors, which some analysts predict will not show improvement until 2011.
A significant contributor to the problems beginning in 2008 was a large drop in foreign investment interest in Bulgarian real estate. A large part of the interest in the 2003 to 2007 period was from foreign investors, and the global financial meltdown simply dried up that interest throughout 2008 and 2009. While some market watchers believe that the residential market is beginning to stabilize, anticipation is high in regards to early spring interest in the coastal markets. There may be some indication already of vacation pre-sales for coastal areas. A good year for vacation property sales could signal a turnaround for Bulgaria's real estate markets.
Properties in Sunny Beach, Varna, and other Black Sea coastal towns have been hard hit in the last two years. Foreclosure rates have been high, with valuation and financing becoming difficult. Some investors are being required to provide full cash payment within seven days of their initial deposits. Of course, in the worst of markets there is opportunity for the hard-negotiating investor. This could be a factor in a recent report from UK-based Property Abroad. The report, Property Abroad – Top 10 Most Popular Countries for Last Year, ranks Bulgaria 9th among the top ten destinations for worldwide foreign investors. From that report: “Bulgaria in 9th [place] is definitely a surprise, […] given the collapse in demand from foreign buyers in 2009. This reflects the emergence of increased investor activity in the latter part of the year, and the focus on cheap property throughout 2009.”
The "darkest before dawn" outlook may just be the case for Bulgaria. Investors worldwide are watching, and beginning to actively investigate the Bulgaria real estate market again.
By www.holprop.com (January 11, 2010)
Bulgaria property for sale | Bulgaria holiday rentals | Bulgaria monthly rentals