With investment companies buying up distressed properties in places such as Bulgaria, to hold on to for long term capital gain and eventual profit, maybe smaller investors should be looking to follow the same path.
In a falling property market, can you still break even or maybe make a profit? With property prices right across Europe and further a field lower than they were a couple of years ago, does this mean that anyone needing to sell has to do so at a loss, or could you still break even or maybe manage a small profit from a sale, if you sell in today’s market. Much depends on the currency you bought in and intend to sell in.
A recent report suggested that prices for property in Bulgaria had now dropped to the same level as it was back in 2007. There are no official statistics for this and the noticeable drop is simply based on listed selling prices between 2006 and 2007 and the fact that sale transactions have fallen drastically towards the end of 2008 and in the first few months of 2009.
Many are seeing this as a sign that the Bulgarian real estate market has completely collapsed and there is little hope of recovery any time soon. However, is this really the case?
There has been much in the press and online lately about London – Sofia based agent, Bulgarian Dreams, who closed their London offices, blaming the economic climate, and disappearing out of the UK owing thousands to many British and Irish investors. I became involved with Bulgarian Dreams back in 2004 when I opted to purchase an off plan apartment in Bansko, Bulgaria. I was one of the lucky ones, although certainly did not feel that way at the time, as I managed to pull out of the purchase and recoop the money spent on the apartment.
Prices for investment properties in Bulgaria continue falling, with no end in sight at the moment. Particularly hard hit are the summer resorts of Sveti Vlas and Slunchev Briag (Sunny Beach), the largest summer resort on the Bulgarian Black Sea. In those luxury resorts, prices have fallen to such an extent that currently there are brand new three-bedroom “luxury” flats on offer for 70 000 euros. A similar fate has befallen the Alpine ski resort of Bansko, where new, completed modern apartments in ‘key locations’ are being offered for 70 000 euros.
Bulgaria’s property bubble has burst in a big way. Prices have fallen by as much as 60% in the last few months, with many recent sales back on the market at substantial price reductions
FACTS ABOUT BULGARIAN PROPERTIES
Two months after joining the European Union, Bulgaria began attracting increasing interest towards local real estates. Its strategic geographic location and the membership in EU and NATO turn it into an attractive destination for property buyers. For sure, you need to have more information before investing your money into a small country with a beautiful countryside and extremely low prices for Europe.More on Facts about real estates in Bulgaria – the latest European Union member
More on Facts about real estates in Bulgaria – the latest European Union member
The background…
The story takes place in Bulgaria – European country with easy access from all over the world, keeping one of the lowest property prices in Europe. Due to the altering of the political and economic system there, salaries are small and subsequently the property prices are small too. Great! – for foreign buyers. It turned out that they can get a ski or sea property at a bargain price just 2-3 hours flight away from home. So the news spread up quickly turning Bulgaria into a magnet for foreign buyers. After joining the EU the harder procedure for acquiring land has stepped aside to a new law, harmonized with the European legislation. So the door for new buyers was opened wider.
