As many property investors keep a close eye on progress regarding Bulgaria’s prospective accession to the EU, prime minister Sergey Stanishev has said that his country will be working tirelessly to meet the required conditions in preparation for membership in 2007.
Property prices have already been shooting up across Bulgaria in anticipation of the accession with a report by Property Frontiers observing that there was an average property price increase of 47.5 per cent as early as 2004, while growth in the first quarter of 2005 was also particularly strong at 10.6 per cent.
Austria has now taken over the EU’s rotating presidency from Britain, and Bulgaria’s situation has been highlighted as one of the major considerations for the tenure. Mr Stanishev has welcomed Austria to the role and has called on EU member states to speed up the approval of Bulgaria’s EU accession treaty.
The Bulgarian government adopted a plan in December that includes 760 measures that should be taken into consideration before EU accession becomes a realistic proposition, and Mr Stanishev has announced that he is confident this will be achieved.
While some UK property investors are waiting for the completion of the project before they purchase land or property in the country, others have taken what they consider to be a calculated gamble, taking advantage of low competitive prices that are likely to rocket in the next few years.
In its Global Property Hot Spots report, currency specialist HIFX estimates that British overseas investors bought 77 per cent more property in Bulgaria last year than they did in 2004.
A report this week in the Sophia Echo has suggested that this policy may well be less of a gamble than some have implied, with research from Italian Unicredit and the Pioneer Investment fund showing that the wealth of the Bulgarian population will increase by more than 52 per cent in the next three years.
With the economy showing steady growth, house prices are likely to rise considerably even without EU accession while buy-to-let mortgages may prove to be particularly profitable as average household wealth steadily increases.
Furthermore, amendments to the Tourism Act approved in November 2005 included the long-awaited decision to abolish Bulgaria’s “double pricing” system, in which foreigners were required to pay higher prices than Bulgarians at hotels, restaurants and at resorts.
Criticised by ultra-nationalist group Ataka, the amendments mean that there will be a general increase in prices that will further benefit the property investment sector.
Aware of the prospective boom in construction within Bulgaria, the government is currently considering banning building work between May 1st and October 15th this year. This reflects a sensible and ultimately forward-thinking attitude to property investment that will do a great deal to prevent the construction of poor-quality properties.
The Sophia Echo reports that a number of low-budget airlines including Wizz Air entered the market in September last year, meaning that Bulgaria is no longer the only country in the region without a low cost airline.
Increased international flight routes from Bulgarian airports were also opened last year, while Sofia Airport is expecting a new terminal in 2007. Yet again, the effect on property investors is likely to be significant, with huge increases in the number of tourists impacting upon the health of the economy and prompting many foreigners to invest in the country.
According to statistics from the official Agency on Tourism, foreign tourists spent €1.661 billion in Bulgaria between January and September 2005, increasing revenues by around ten per cent compared to the same period in 2004.