Bulgaria Construction/Real Estate Report

Published by: Internet Securities, Inc. (Intellinews)

Published: Jul. 25, 2008 - 15 Pages

Table of Contents

The holiday homes market witnessed very strong expansion since the start of the century driven by the good economic performance of the country, EU accession prospects, rising tourist appeal and strong interest by UK and Irish citizens. The boom was supported by fast penetration of financial intermediation and poor regulation of building activities by authorities, which contributed for over-construction in some areas.
The sector outlook changed recently with considerable slowdown in the expansion of tourist arrivals and the massive drop of British buyers of holiday homes. Thus the gap between supply and demand widened sharply and resulted in considerable decline in the yields from such investments. At the same time, investors remain optimistic announcing more and more ambitious projects that will further encourage the imbalance on the market. On the positive note, we highlight the diversification in the group of buyers of holiday homes with growing interest from the Russian, Scandinavian, CEE, Romanian and domestic markets.
The initial focus of investors on the southern seaside (in particular the Sunny Beach area) and the consequent over-construction, made developers turn to other locations for their projects. Now, the interest is in the northern coastal line. This can be also explained by the shift in preference towards bigger projects offering many facilities and value added services.

Abstract

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