Bulgaria’s capital city, Sofia, could be the next big thing in property investment, according to independent European property investment analysts, Property Secrets.
Although Bulgaria has been pegged as one of Europe’s best investment opportunities for the last few years, there has always been a focus on coastal and ski resorts. But now, says Property Secrets, it is the cities that are big news.
“We believe the real opportunity in Bulgaria lies, as it does in other markets in central and Eastern Europe, in the cities, and in particular Sofia,” says Property Secrets.
“Demand for property in the cities is driven by three factors: the emerging middle classes who provide the demand for modern apartments, plus increasing affluence coupled with the supply of capital in the form of mortgage lending. We are currently seeing all these trends in Sofia.”
Property Secrets says it believes there are a number of factors why Bulgaria - communist until 1989 - in particular has become such a good investment, which include the country’s stable political, economic and social climate and the fact it has some of the lowest operational costs and tax rates in Europe.
“The property boom started in Sofia, and then moved to the coast - Varna - and the ski resorts of Bansko, Borovets and Pamporovo followed,” says Property Secrets, “And we believe there is great potential for sustainable long term growth in Bulgaria, especially in Sofia and other key cities.
“At Property Secrets we see great potential in Sofia as a property investment hot spot for the future. All the fundamental factors are in place for Sofia to grow in the same way as other emerging CEE cities have previously done.
“Old stock and limited supply of new developments will see increased growth in 2007. If mortgage lending continues to grow at such rapid rates as previously, the amount of lending in absolute terms will quickly reach a critical mass to drive price growth very fast indeed.”
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