The
average
2003
increase
of
Bulgarian
real
estate
prices
is
between
24
%
and
28
%.
The
expectations
are
slowing
down
the
tendency
and
keeping
a
moderate,
but
systematic
pace
of
increase
until
year
2007,
the
tentative
year
scheduled
for
Bulgaria
to
join
the
European
Union.
Local
property
market
is
experiencing
an
impressive
revival
and
there
are
several
factors
that
contribute
to
this:
- Mortgage lending potential - currently, mortgage loans are 5% of the total credit supply within the local banking sector. In developed credit markets, this rate is usually in the range of 15 - 20%.
- Increased foreign direct and indirect investment in Bulgarian real estate determined by:
- Bulgaria's expected EU membership perspective;
- Expanding tourist industry;
- Stable macroeconomic indicators:
- GDP annual growth of 4.5 % to 5%;
- Dropping unemployment rate: from over 16 % to under 13 % for the last 15 months;
- Improved credit rating – BBB-.
- Attractive Return on Investment rates in the real estate sector – on average 15 to 18 percent.
The
market
of
Black
Sea
coastal
real
estate
in
Bulgaria
has
grown
significantly
since
the
beginning
of
year
2003.
Sales
prices
of
brand
new
income
residential
properties
have
increased
almost
twice
in
some
areas
compared
to
year
2002.
Seafront
real
estate
was
on
average
30%
more
expensive
than
water
view
locations.
Bulgaria
is
still
a
popular
holiday
destination
for
lower
income
tourists,
which
is
the
main
reason
for
higher
demand
for
smaller
and
cheaper
real
estate.
Local
market
of
residential
properties
in
big
cities
along
Black
Sea
coast
has
grown
notably.
During
the
last
year
demand
was
higher
than
supply,
due
on
one
hand
to
the
increased
supply
of
mortgage
loans
and
on
the
other
to
consistent
migration
of
workforce
from
inside
the
country
to
sea
resorts
and
big
coastal
urban
centers
like
Varna
and
Bourgas
where
more
jobs
are
available.
In
2003
the
unemployment
rate
for
the
city
of
Varna
was
5%
in
accordance
with
the
NSI
of
Bulgaria.
As
a
result,
the
price
hike
of
residential
property
was
almost
24%
in
Varna.
Plots
of
land
were
also
attractive
for
investment
purposes.
In
2003
their
prices
had
increased
more
than
30%
on
average
compared
to
year
2002.
Some
beachfront
parcels
for
development
of
leisure
properties
had
reached
EUR
35/sq.m.
compared
to
similar
properties
sold
at
USD
15/sq.m.
in
2002.
In
certain
areas
close
to
leading
resorts
like
Albena,
Golden
Sands,
Sunny
Beach
and
others,
prices
had
increased
more
than
twice
for
the
previous
year
and
varied
between
EUR
35-55/sq.m.
During
the
first
quarter
of
year
2004
the
REMI
index,
reflecting
real
estate
trends
on
the
residential,
business
and
land
markets,
has
risen
with
4.28
points,
prodded
by
the
rising
prices
at
residential
areas.
According
to
NSI
of
Bulgaria,
the
quarterly
real
estate
prices
growth
rate
is
12.5%.
Yet,
Sofia
is
the
most
expensive
real
estate
market
with
2.8%
increase
followed
by
the
towns
of
Varna
(23.7%),
and
Bourgas
(16.8%).
