09 November 06 - Bulgaria still riding high despite negative publicity

Bulgaria received the second highest number of enquiries from prospective overseas investors for the second month in a row, reports property website The Move Channel.

Despite a slight fall in its overall share of enquiries, Bulgaria beat property hotspots Spain and Italy into second place of TheMoveChannel.com’s Top of the Props chart by a healthy margin for the second month on the trot in October 2006.

This fact is even more striking when you consider not only the strength of the Spanish and Italian property markets and their popularity with UK investors, but also the level of negative publicity that Bulgaria has recently received.

Bulgaria shrugs off a negative press

The high levels of interest in Bulgaria (as reflected by TheMoveChannel.com’s enquiry levels) are all the more noteworthy given the critical reports the Bulgarian property market has received in the press over the last few months.

In August 2006, Inside Track highlighted the risks and complications of investing in Bulgaria that many investors might be unaware of. Then in September, Overseas Property Professional reported that the Directorate for National Construction Control had revealed that 195 illegal buildings were taken down in Bulgaria in the first six months of 2006.

And to cap things off, investment specialists Assetz last month highlighted how the returns on money invested in Bulgarian property had plummeted from 116 per cent in 2005 to just 35 per cent this year due to factors such as oversupply of holiday rental apartments; as a result, Assetz proposed that the current UK market is more likely to deliver higher returns while Bulgaria no longer offers “instant gains”.

But as things looked like they were going from bad to worse, Bulgaria received some welcome news. In September, the European Commission confirmed that Romania and Bulgaria would be joining the EU in January 2007.

This announcement seems to have boosted investor interest. Bulgaria retained its number two slot at a time of critical media reports and its fellow EU entrant Romania rocketed up seven places in this month’s chart to enter the Top 10 for the first time. Foreign currency specialist HiFX also reported higher interest levels in October with a 40 per cent increase in demand for Bulgarian property, while Mark Stucklin of www.spanishpropertyinsight.com acknowledged that Eastern European markets such as Bulgaria had “dented” the “overall demand” for property in Spain.

Elizabeth Coley, Business Manager at The Move Channel commented: “Buying property in Bulgaria has become very popular amongst UK property investors due to a combination of media hype and very affordable prices. However, the Bulgarian market has had a rocky time of late with oversupply of holiday accommodation causing growth to stagnate. EU membership in January 2007 should offer strong long-term growth prospects but it would be unwise to consider the Bulgarian market still capable of delivering a quick buck.”

Julian Ramsden, Director of Real World International, commented: “Property in Bulgaria is still some of the cheapest in Europe. With confirmation of Bulgaria’s entry to the EU prices are expected to rise gradually over the coming years. Buying high quality property in the most attractive locations will provide the highest capital appreciation and the biggest returns for investors.”

Germany going strong

Another significant change in the Top of the Props chart was that Germany climbed a staggering 11 places to burst into the Top 10.

Meredith Drynan, Sales Consultant with www.e-quity.com commented: “Germany’s surge in popularity amongst international property investors is a worldwide phenomenon with funds and individuals realizing that prices are undervalued and destined to catch up with those in Western Europe. While not a short-term investment, the big cities in Germany will certainly bear fruit for those investors who get in now, as prices are just beginning to trend upwards.”

View the Top of the Props League Table

News provided by www.themovechannel.com © Copyright, On The Move Limited, 2006

Photo: podoboq