Bulgaria – Real Estate Investments

Hardly is there an EU member state at the current moment with more favorable real estate market than Bulgaria. As a matter of fact, according to the officially published data Bulgaria and Romania are among the countries with highest percentage of personal real estate property ownership within the EU (over 90 % of the population owns their own home). However, that fact is far from causing the real estate market inactivity. On the contrary – the demand for new, communicative and well-located properties in the largest cities is intensive. That is equally valid for the available business properties as well.

According to the 2013 data the real estate deals in the largest cities increased with over 10 % compared to the previous year. This is a clear indication of not only the market movement itself, but also the investors’ interest (local as well as foreign).

But which are the factors that caused this increase?

A series of factors which aggregate influence resulted in the current phenomenon could be given. The most important ones are as follows:

- Personal capital accumulation

Many companies as well as individuals accumulated sufficient capital funds that could be used in such deals. The main purpose behind such purchases is almost always “investment” – direct (property generating direct income) as well as indirect (rental costs reduction).

- Bank Loans Access Facilitation

After the initial austerity measures applied by banks, Bulgaria’s banking environment is going back to normal at this stage in terms of deposits as well as credits. That determined the behavior of many investors who oriented (not unlike the pre-crisis period) to re-direction of their available capital to real estate investments rather than bank deposits.

- Overall optimism

Bulgaria’s business environment is filled with overall optimism at this moment mostly following the expectations about more ostensible stability of the present political conditions and most likely full or at least longer office of the current government (lack of upcoming political chaos). That positive mood, which was already felt during the office of the previous government, influenced investors in a certain way, while the strict fiscal state policy was and continues to be an indisputable warranty of business stability.

In conclusion, there is sufficient evidence that the current real estate market movement (house and business properties) most probably precedes and even contributes to not only an intensified investment interest, but also an upcoming considerable economic growth.

January 30th, 2014 Posted by RPNAdmin Filed in: Other