Since the collapse of communism in 1989, Bulgaria has been opening itself up to the rest of the world, and its natural attractions work their magic.
Bulgaria, a country located in the very heart of the Balkan Peninsula between Romania and Turkey, shares common borders with Greece, Macedonia, Serbia and Montenegro. As such, it provides a natural gateway to the emerging markets of the CIS and Asia.
Bulgaria is set to join the European Union in 2007. It has firmly embraced the twin principles of democracy and market economics, and is now a full member of NATO. This will open trade with North America.
Millions of Euros have been poured into Bulgaria via programs like the SAPAR and PHARE projects to improve the infrastructure and to prepare for EU accession. The money spent through these programs has stimulated the tourist sector and has already had a hugely positive effect on the Bulgarian economy. Property prices are rising quickly and are expected to increase further between now and EU accession in 2007.
Bulgaria enjoys a stable macroeconomic climate with:
- Economic growth of around 4.5% - one of the highest in Europe
- Annual inflation of 3.8%
- A low taxation rate across the board
- A strong growth in tourism
Look at what has happened to the property markets of Ireland and Portugal following ascension. And what about the Czech Republic, Poland and Hungary leading up to ascension?
The Economist quoted the Czech stock market as the most profitably "developed" market for foreign investors of 2002.
The national currency, the Lev, has been Euro-pegged since 1997, thus stabilising the economy. The Euro is expected to replace the Lev as official currency around 2010.
In Bulgaria, property offers better value for money than in any other holiday destination in the European continent. The area is still relatively undiscovered by tourists, so in Bulgaria, property has yet to see the spiraling prices that have typified areas such as Spain, France and Greece.
For example, a 2-bedroom villa within walking distance of the beach costs around £75,000 in Bulgaria compared to approximately £180,000 in Spain, £200,000 in France, and £110,000 in Greece.
A ski chalet in Bulgaria would cost around £60,000, compared to approximately £250,000 in France and Italy.
What about a country retreat? In Bulgaria this would cost anywhere from £8,000, a price virtually unheard of in any other region in Europe.
Bulgaria is still a new holiday destination to the British holidaymaker, but more and more travel agents are now including it in their brochures and, with such good value for money, it's likely to do very well.
Bulgarian tourism is currently experiencing something of a boom. According to the figures for 2004, the number of British tourists rose by 6.3% to 239,000, and the number of German tourists rose by 5.7% to 535,000. For the first time, Bulgaria entered into the top ten tourist destinations worldwide for the UK market.
Furthermore, in 2003 there was a 20% shortfall in tourist bed spaces. Developers and investors are building hotels and apartments around the resorts currently to meet this demand.
Visit the Black Sea coast outside of peak season to confirm the growth in tourism. See literally dozens of hotels being built or extended, ready for the new summer season.
Even the World Tourism Organisation placed Bulgaria near the top in terms of tourism growth. In 2003 a growth of 23% was reached compared to 2002 and the income comprised of 13% of the country's GDP.
Bulgaria may not have the same 'destination appeal’ of Spain or Portugal just yet, but with its favourable climate, safe sandy beaches and incredibly low cost of living, in combination with its historical heritage, that may be about to change the closer it gets to entering into the EU in 2007.
So what does all this mean to you?
In Bulgaria, property makes a good investment considering the long-term prospects for the country and offers considerably better value for money than any other European destination.
The majority of people to whom I have spoken are buying property in Bulgaria for a holiday or second home, often with a view to retirement in later years. There are also an increasing number of investors who are simply buying property with the intention of making a capital gain on their Bulgarian property investments.
This increasing interest, along with other factors, such as the rise in tourist numbers and increasing awareness of the opportunity, means that in Bulgaria, the property market will see huge price increases soon.
So where are the best places to invest and who should you trust?
This all depends on your circumstances, and whether you want to live in Bulgaria or just want a second/holiday home. Or maybe you just want a Bulgaria property that will appreciate in capital in the near future?
Whatever your circumstances, there are four main geographical areas that are ripe for investment in Bulgaria.
- Lovech - (Historical, Cultural and Business Centre)
- Veliko Tarnovo - (Historical and cultural)
- Bansko - (Ski Area)
- Black Sea - (Beach Resorts)
- Sofia - (Capital City)
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