EU entry heightens Bulgarian dreams

 
With Bulgaria and Romania now members of the EU there are expectations of significant economic growth and a continuing property boom – but not all agree on the latter.

One in seven UK investors thinking of buying a property abroad say they would consider either Bulgaria or Romania, research by MRI Overseas Property suggests. Meanwhile foreign tourist visits to Bulgaria were up by 8.3 per cent last year, with 1.5m foreign visitors to its Black Sea resorts alone.

And property prices rises in Sofia, Black Sea and Bulgarian ski resorts have been extensively reported.

‘Bulgaria and Romania’s official inclusion in the European Union is a key opportunity for property investment in these emerging markets’, said MRI sales director John Triton. ‘Based on the past history of other eastern bloc countries joining the EU, where property prices have risen significantly, these markets look set to become strong areas for capital growth.

However, property investment specialist Assetz is warning that although ‘former communist states have been talked up as property hotspots for just over two years now and although some investors have seen dramatic price increases, there is little evidence to suggest that such rises will continue into the long term future’.

Paul Collins, overseas property editor for BuyAssociation, told Assetz that although the tourist market in Bulgaria has performed strongly of late – chiefly because it offers skiing in the west and beaches in the east – ‘the country has got some way to go before it rivals Brits' favourite European holiday hotspots’.

And the rapid expansion of the tourist resorts in these countries is bringing its own problems since it is taking a while for infrastructure to catch up in some places, he said.

’Low-cost airlines are coming in regularly now, but the road and rail networks are not to the same level as yet. Essential services seem to be adequate, though you may have trouble getting a broadband internet connection into an older property’.

Another problem he identified was the weather. The Black Sea coast is beautiful during the summer, with temperatures rivalling the Mediterranean, but this only stays for a window of around five months. And in January the temperature can drop to as low as minus 20 on the coast.

This means rental potential is generally limited to the summer months.