NOTES ABOUT THE BULGARIAN
CONSTRUCTION SECTOR
- Rapidly growing sector attracting serious foreign and domestic
investment
- Large percentage of FDI locating in real estate.
- 1,5 million m2 new construction completed in 2005
- 2 million m2 new construction expected to be completed in 2006
- Massive construction in the main tourist areas
- Black sea
- Mountain resorts
- Larger cities especially Sofia, other cities are following
- Relatively cheap cost of land, prices have been going up lately
- Relatively cheap cost of labor – Average salary – 400 Euros
- Relatively cheap cost of construction – finished construction comes at
$250-300 Euros per square meter.
- Lack of modern facilities trivial to Western Europe (shopping centers,
service centers, modern office buildings, high quality residential areas
and so on), has fueled construction demand
- Great price difference between Bulgaria and Western Europe, making
buying of real estate in Bulgaria a very attractive investment for EU
countries.
- Bulgaria is rapidly becoming a fashionable property investment
location for EU countries, especially the UK, Ireland, Germany, the
Netherlands, Greece and Italy.
- There are already UK investment funds locating money in Bulgarian real
estate. Example: Equest Balkan Properties: 200 million Euro fund.
- The real estate market will need continued interest from foreign
investors to sustain its strong price appreciation.
Overall, there is a very good return in real estate
investment in Bulgaria, oftentimes over 100% +.
Cost of basic construction
The average cost of construction in Bulgaria for a quality building with
construction done, wall plastered, and ceilings done is
250-350 Euros per m2
Additional costs
The additional costs of construction like bathroom modeling, hardwood floor
installation and all others comes to another
50-70 Euros per m2
At present it is a safe assumption that new construction costs an average of
300-425 Euros per m2 |
