Bulgaria real estate market “strongest in the world”, according to market-leading research and property analysts - 10 July 2008
July 21st, 2008
Not only has Bulgaria dominated Knight Frank’s Global House Price league tables for the past year, but its mortgage market is now one of the strongest in Europe, even amid the prevailing worldwide credit crunch
Bulgaria’s real estate market has been the world’s strongest since 2007, according to the latest Bulgarian Banking Sector Analysis published by leading research house RNCOS. Even in the midst of an international credit crunch, Bulgarian property buyers took out over €2.5bn in mortgages over the past year, a trend that is expected to see an unprecedented forecast CAGR of 88% by 2010.
Housing loans now account for over a third of all lending products in the country, making Bulgaria one of the fastest growing credit markets in Europe, bolstered by a huge increase in mortgage products which offer attractive incentives for investors.
Bulgaria’s real estate market has consistently beaten all records and expectations. Bulgaria recently clinched its third consecutive placement at the top of Knight Frank’s Global House Price Index for the first quarter of 2008, with an annualised growth of 31.5%. Bulgaria beat France, Hungary, Austria, Switzerland, Poland and Denmark, all of which recorded 3% growth or less for the first quarter of 2008, while convincingly outpacing Lativa, Estonia and Northern Ireland, which all recorded negative growth of -20% and less for the year.
Analysts remain extremely optimistic about Bulgaria’s long-term growth, in part due to its bourgeoning tourist industry. Tourism is tipped to increase by over 10% in 2008 according to the State Tourist Agency, and the country’s image as an emerging tourist hub is expected to be bolstered with the addition of multi-million euro golf clubs and resorts in the Black Sea region.
Currently there are nineteen golf courses being built in Bulgaria, including a €50m development near Pravets, and experts believe that strong investment interest will eventually lead to the construction of up to forty more resorts in the near future.
In a further show of confidence, American investors who have been hard hit by the credit crunch have put over $1bn into Bulgaria, seeking to capitalize on Bulgaria’s growth boom. According to Borislav Boyanov, President of the Bulgarian American Chamber of Commerce, Bulgaria’s NATO and EU memberships, its 10% corporate tax and the agreement on joint military facilities between the US and Bulgaria have contributed greatly to this investment boom. “The world economic crisis and its global consequences have not affected any essential aspects of Bulgarian-US economic relations. US investors keep coming because Bulgaria is a strong emerging market and continues to create favourable business conditions”, Boyanov said.
