Archive for January, 2007
Sunday, January 28th, 2007
Bulgaria Is the 34th Country in the Best Places For Living List
France is leader in the world classification; Bulgaria attracts with low prices and favourable climate
Bulgaria is the 34th country in the world among those determined as the best places for living – reveals the latest classification of the American magazine “International Living”, which was published this week under the title “Index for Life Quality”. Bulgaria shares that high position in the list of 193 countries with Panama and Slovakia. Great Britain takes the 37th place – it is the next country after Bulgaria, and Greece and Cyprus come after it with even results. Lithuania, Poland and Romania are the next countries in the classification. Romania takes the 45th place together with South Africa, the Dominican Republic, Brazil, Chile and South Korea.
Bulgaria takes one of the first places because of the low prices and favourable climate, according to “Scotsman” newspaper.
France is absolute leader in the classification, in spite of the high taxes, bureaucracy and the high cost of living. Still, it remains the best place for living in the world because of the high-speed trains, the good hospitals, its culture, its ski resorts, its beaches and mild climate. In addition, Paris is the most beautiful and romantic city in the world – says Laura Shedrian, Management Director of “International Living”. It is said that the cost of living outside Paris is much lower, and a house could be bought for less than 100 000 dollars.
The next countries that take places among the first five in the world are Australia, the Netherlands, New Zealand and USA. Argentina takes place in “top 10” for the first time. “Australia is a very attractive destination, especially if you are young” – writes the magazine, thus explaining its second place in the classification.
USA used to take the first place for 21 years, but last year they took the 7th place because of the fall-back in the sphere of civil liberties.
The countries of Latin America have achieved the greatest progress in terms of life quality. The Dominican Republic has gone up with 50 places in the classification. Iran has gone down with 43 positions. Russia and China take the rather unsatisfactory 116th place.
Italy takes the good 8th place because of its culture and climate, its comparatively moderate prices and good transport.
The classification has been made on the basis of 9 criteria – the cost of life, culture and entertainments, economics, environment, freedom, health care, infrastructure, safety and risk, and climate. Its authors explain that experts go around the world for 11 months in the year, so that they could make the necessary survey to determine which countries have the lowest cost of living, the lowest taxes, the greatest possibilities for realization on the market, the best possibilities for starting a new life, etc. The results of the survey are published in the beginning of each year – in January. This is the 26th consecutive survey of that kind.
Great Britain is left behind by many other European countries, because of its unfavourable climate, just like the Netherlands, Denmark, Luxemburg, Liechtenstein and Germany. Great Britain is left behind also because of the bad health care, the transport and high prices.
Iraq, and especially its capital – Baghdad is the most dangerous place in the word, because of the devastating war there. Somalia, Yemen, Sudan and Afghanistan have also been determined as high risk places.
The cost of living is lowest on the Pacific island Nauru, and highest in Norway, USA have the best infrastructure, and Zimbabwe is known for its best climate.
Haiti is known as the most corrupt country, the people of Andorra have the longest lives – 82,5 years, and Australia is the best place for registering a new company.
Still, some people do not approve the method offered. According to them, other surveys of that kind show rather different classification.
“International Living” magazine is established in 1979 and it has 400 thousand subscribers. It has been established with the goal of helping people be more mobile.
Friday, January 26th, 2007
Downtown or out of town: Where to invest in Sofia?
In every capital city throughout Europe it happens downtown.
Defining “it” and “downtown” is simple; it’s where government is located, it’s where big international corporations have their offices, it’s where cultural events such as theatre, opera and ballet performances happen, and it’s where bars, nightclubs and restaurants are located. It is also where real estate prices are the highest.
In Bulgaria, all of the above is true. Sofia, however, saw a move away from downtown in the residential sector because of the pressures of limited space. At first, Lozenets became the place to live. The leafy suburb was and still is a 20-minute walk to the city centre. It boasts parks and tree-lined streets, beautiful squares and the requisite premium on housing prices. In the past 15 years, this residential suburban utopia attracted the attention of developers eager to sell a slice of city paradise to those fortunate few adapting and emerging into a new political system and finding that they had the means and the ability to choose where they lived. The fortunate few eventually became a fortunate many as Bulgaria slowly got to grips with the new social and economic systems and for the new Bulgarian haves the address to have was in Lozenets.
What came to pass is downright ugly. Every land plot free of buildings – and many not free – was snapped up. Existing two-storey houses were torn down and high-rise apartment blocks shot up to keep up with the demand for those with the must-have address. The saddest part is that once a developer acquired a plot of land the questions asked were, how high can I build? How cheaply can I do it? How close can I get to the land boundaries? And, how much sellable space will I have at the end? Thanks in no small part to the flexibility of those in government responsible for providing the answers, we arrive at the crazy situation we see now, spacious expensive apartments with views on all sides of neighbouring buildings and their spacious expensive apartments built so close together that you feel you are an intimate part of your neighbours’ lives. This has now led to the once-beautiful and desirable Lozenets being lambasted by locals and foreigners alike as “soulless” and “overcrowded”.
The developers have moved on from Lozenets, but where to now? The profits from Lozenets need re-investing. Developers needed more land and cheap. It seems they have all tipped up on the outskirts of the city, south of the centre but north of the ring road. They have brought the same set of questions with them and their number has swelled on the short journey.
However there is now a big difference, Lozenets was and is close to the city centre; Manastirski Livadi, Vitosha, Studentski Grad, and Dianabad are most certainly not. The other problem facing the developers is who is going to buy the new constructions? Most Bulgarians own property and the population is declining. Wait! All is not lost! There is a ready-made group of buyers with oodles of cash in the UK and Ireland all of whom want a piece of the Bulgarian property phenomenon and there are plenty of agents keen on the 5 to 10 per cent commissions. Visit any website or read the literature for these new developments; it’s amazing! Quotes direct from the web; “15 mins from city centre”, “close to a ski resort”, “fantastic panoramic views of Vitosha Mountain”, “completed to highest luxury standards” plus “year round rental!” Wow, I have to admit that sounds great! However, 15 mins to the city centre is at 3am when there is no traffic. The truth is that on any working day, it’s a 30 to 60-minute drive, depending on your route. Also omitted is that your fantastic panoramic view of the mountain is going to last as long as it takes them to build the new development in front of you whose brochure is already advertising your view, and this ski resort, calling the existing facilities on Vitosha a “resort” pushes the boundaries of truth.
This isn’t the developers concern; the buyer should check the suitability of the purchase. The first question a buyer should ask is, “who is going to live there?” Personally, I don’t have a clue!
There are hundreds of these apartments being built and all are being sold with the promise of rental returns.
The Bulgarian average salary is approximately E 200 a month, therefore tenants must have an income way above average or be expatriates. A glance at my address book surprisingly tells me that I personally know more than 100 expatriates. With absolute confidence I can say none of them will live in the new areas. Generalising, expatriates fall into roughly two categories. Group 1 have a family often with children. Group 2 are either single or have a partner but no children. Both have accommodation allowances from their company and can choose where to live. Group 1 will most of the time want to live in a house, with a garden and bedroom for each of the children. Group 2 have no need of the house, garden or the maintenance that goes with it, but would like to have the option of walking to work, restaurants and the other distractions mentioned in the first paragraph; all located downtown! Unfortunately the developers didn’t consider this when they left Lozenets with their large profit, easy to erect apartment buildings in tow. A disaster is coming and it’s close. If rumblings in the Irish press are an indicator, already investors are complaining about the absence of tenants and their rental income.
Investors, look at Sofia. There are many apartments available that have not come from the two-for-the-price-of-one school of architecture and exude character and style.
Downtown is easily recognised on a map of Sofia; somewhat obviously it forms the very centre of the city. Although these apartments can become sound investments with rental income, foreign investors have traditionally been wary of them for several reasons. First, many of these apartments are in need of full renovation as many are of pre-war construction and though structurally sound have seen little in the way of care. Layouts are strange with toilet doors opening into kitchens, shoddy DIY and original electrics and plumbing. Secondly, foreign investors have limited time to spend on site and worry about sub-standard workmanship. It can all seem as too much and too expensive of a hassle. It’s worth remembering, however, that you buy a piece of history, a part of Sofia’s soul and restoring it will be hugely satisfying. Once all the work is complete, the value of the property is likely to be way in excess of the combined purchase and renovation. Work is often of an excellent standard and is carried out with competence and speed. As with any professional work, finding the right people is a must but these apartments do genuinely offer the potential for those rental returns promised on the innumerable websites because they obey the three golden laws of property investment – location, location and location.
Bulgaria Property Wise
Friday, January 26th, 2007
Golf courses sprout to rescue Bulgarian Black Sea coast investments
After several years of feverish development of holiday apartments and hotels, investors are redirecting their interest to commercial real estate.
Contrary to current trends, the three fully completed and functioning golf courses in Bulgaria are nowhere near the seaside. The first one was built in Ihtiman by the owners of SofiaAir and, having been the first attempt in the country, is not perfect. The golf course in Ihtiman was to a great extent a project of social rather than business significance. Local residents had turned the plot that the Municipality of Ihtiman sold for the purpose of building the golf course into an illegal rubbish depot. The investor recovered the land and thus relieved the local authorities of their financial and environmental problems. SofiaAir bought two more plots, respectively near Razgrad and Sliven. The company put the Sliven golf course into operation and is completing construction of the Razgrad one. SofiaAir is a co-investor in the grand project for a golf course, which is being built in the area between Bansko and Razlog. The other major investor in golf is advertising boss Krassimir Gergov. His is the third operating golf course in the village of Ravno Pole in the Municipality of Elin Pelin, which opened last year.
The investment in the golf course near Razlog amounts to EUR 62 million. The plot is in the valley of Razlog, three km from Bansko. The golf course will spread over 900 decares and will be 6210 metres in length. The built-up area will be about 120 000 sq m and will consist of hotels and apartment buildings. Mountain streams will flow through it and the golf club will be in the centre of the course.
The golf complex is already being built, and the first buildings – hotels and apartments, which are being built near the entrance of the golf course, are in an advanced stage of works. The huge investments in the golf course make the holiday villages attractive and the houses there are sold at prices ranging from EUR 1200 to 1500 a sq m. Landowners are selling plots of the 9th (second to lowest in terms of quality and fertility) category at prices of EUR 30-50 a sq m.
The logic behind the construction of the golf courses started by SofiaAir was to create a network of courses that covers the whole country. That is why they bought the plots near Razgrad and Sliven that, together with that in Ihtiman, form a kind of a ring in the country. According to SofiaAir president Lilyan Todorov, the area around the golf courses is of no importance to the golfers. In his opinion, the significant factors are the easy access and the variety, meaning lay and number of holes, and not the variety of properties that will be built nearby.
However the similar sites that have been built near the Black Sea coast follow exactly the opposite logic. They offer not only courses designed with the help of international golf pros, but also large surrounding areas for property construction.
There are over 10 investors’ projects for golf courses and they are at different stages of construction. According to the latest government data, investments this year in the more than 10 golf course projects that are currently in different stages of construction amount to 700 million leva. The largest share of these funds will go for construction of golf courses on the Black Sea Coast. The total amount of the investments in the region of the northern Black Sea coast is nearly EUR 320 million.
A first-class-investor certificate has been issued to Cabland Golf Complex for the construction of a golf course near Pomorie. The investment in the complex there is E 370 million, and the owners of the company are the registered in Malta Darnik Ltd (80 per cent) and Pomorie municipality (20 per cent). According to data provided by the manager of Cabland, Dario Tomaletti, the investments come from abroad, mainly from the Gallagher family, which invested in several golf courses in Spain. The course will be built over 2000 decares near the village of Kableshkovo.
Three investment projects for the construction of golf courses in the area of Balchik were announced. The Light House course is an investment of Pirin Golf and it was entirely designed by Ian Woosnam. The other two courses under construction in this area were designed by Gary Player – The Black Sea Rama near Balchik and The Thracian Cliffs near Kavarna.
Investors in The Black Sea Rama are Krassimir Gergov, sociologists Kuncho Stoychev and Andrey Raychev and investment company Landmark Properties. The site is being built in the area called Tabiyata and the investment amounts to nearly E 103 million. The price at which residential properties will be sold is EUR 1700 a sq m. Besides the course and the residences, the complex will offer tennis courts, a spa centre, gyms, football pitches and swimming pools.
The Thracian Cliffs complex will cost EUR 120 million and is the largest of the three projects. It is situated between the villages of Topola and Bozhurets on an area of 1400 decares. The investor here is the international company Thracian Cliffs Golf and SPA. The investors are planning to build a five-star hotel with 3000 beds.
According to Address Property Agency data, the price of land in the region of Balchik, Kavarna and Shabla ranges between E 40 and 100 a sq m due to the construction of the golf complexes. Property owners hope that investors in hotels and apartment buildings will follow the investors in the golf courses.
A month ago investment company Bulgarian Land Development purchased 85 decares of land at the price of EUR 3.3 million or EUR 39 a sq m. The plot will be used for the construction of a modern complex – Harmony Hills.
Presently 200-250 apartments in holiday complexes under construction are for sale and about as many again have already been sold in the region of Balchik and Kavarna. Apartments around the golf complexes are sold at the price of EUR 700-1500 a sq m.
The construction of a golf course and a holiday village is beginning in the vicinity of Primorsko. It will be in the area called Silihlyar. The investor in this site is Primorski Golf, in which the municipality holds 90 per cent of the shares with the contributed property of the land and the Yuzhen Golf Company, owned by Krassimir Gergov, holds the remaining 10 per cent.
Fort Nox started building a practice course and two apartment building complexes in the vicinity of Sunny Beach. The whole complex is situated on an area of 100 decares, but the course will be a small one – only 11 decares and will have only three holes. 800 apartments will be built on the rest of the area.
The company Oil and Gas Research and Production, which is based in Pleven and owned by the Varna group TIM, also announced its intention to build a golf course. They have registered the company Golf Shabla and as the name indicates they are going to work on the completion of the project of the site near Shabla. The investment here is EUR 20 million.
Manuel Sanches, President of Ferry Group that invested in the village of Katina, said that golf in itself was not profitable. Profit is made from the activities that go along with it. This is probably why so many golf projects are under construction at the Black Sea coast.
Address Property Agency stated that investors in the Black Sea coast hoped that these projects would make the tourist season longer and attract tourists of greater affluence.
Property brokers who deal in apartments in the new holiday complexes both at the seaside and in the mountains already point out golf course proximity as an advantage. The apartment buildings near the golf courses were extensively presented at the Property Expo forum at the end of October.
The golf complexes which are being built at the seaside are located next to or within the 20km zone, where old village houses and plots sold rapidly in the past four or five years. Investors bought houses in this area at the price of E 10 000 because they believed that after the coastal line is built-up the interest would shift to them. National property agencies such as Address, Foros, and Yavlena claim that there has been no demand for properties of this type for over a year.
The successful completion of the golf-complex projects in this area might revive the market of properties there and bring returns to the investors who bought properties with the intention of resale.
According to the experts from Address, if managed well, the properties near the holiday complexes may bring their owners annual rental returns of four to five per cent.
But this will happen only if the authorities in Bulgaria solve a number of major problems – the construction of roads, filtration stations and sewerage systems, electricity supply and the whole technical infrastructure.
Bulgaria Property Wise
Wednesday, January 24th, 2007
Boom of the Deals with Agricultural Land in 2006
The number of the deals with agricultural land reached 92 000 in 2006 which is an increase of nearly 100% compared to the preceding year, said at a press-conference the Deputy Minister of Agriculture and Forestry Svetla Bachvarova. The growth marked by the market is due to a great extent to the activity of the investment funds focussing on the agricultural properties which are behind more than half of all transactions.
The average market price of the agricultural lands has increased up to BGN 200 per decare that is 20% more compared to 2005.
There is a big increase in the average price of the agricultural land in the north-western regions, as it has reached BGN 162 per decare (40% compared to 2005). The number of the deals in the region has increased by 60%, as nearly half of the lands sold are situated in the region of Vidin, namely 90 000 decares. In the north-eastern region, which remains the most active market in the country in 2006 as well, there are 30% of the deals executed, at an average price of BGN 220 per decare that is an increase by 26% compared to 2005.
During the last year the demand on the territory of the whole country exceeded the offering, which accounts for the increase in the prices and the number of deals. The market intensification is directly connected to the joining to the European Union and to the general agricultural policy of the Union for direct payments per unit of area, said Bachvarova. The stabilization of the market is a result of bringing near the prices in the different regions. The landed funds are also an important factor, as they take part in more than 50% of the deals in 2006.
The European market is extremely conservative regarding the purchase-sale of agricultural land, as there are many serious restrictions. The market price of the properties in Bulgaria is 4-5 times less compared to the average price for the European Union, and most probably it will not become equal in the future 3-4 years according to Deputy Minister Bachvarova. The expected step of an increase in the price of the agricultural land in the coming years will not exceed 10-20%.
According to Bachvarova there is a tendency in 2007 towards a decrease on the market for purchase-sale of agricultural land and strong intensification of renting. There are totally 3.8 million decares granted on lease in 2006. The value of the rent paid in 2006 increased by 20%, which was also the prognosticated increase in the price in 2007. The rents in Bulgaria correspond to 60% of the average value of the rent wanted within the European Union.
There will be a serious increase in the price of the land for non-profit purposes in the coming year. During last year the number of the deals increased by 23% compared to 2005 up to 8596. There are 47 219 decares of land for non-profit purposes sold, which is an increase of 34% to one hundred percents. The average market price remains high, namely BGN 30 543 per decare that is an increase of 7.2%.
The lowest average price has been registered in the north-western region, namely BGN 1134 per decare, followed by the Northern central region – BGN 5261 per decare. There is an increase in prices of 35% registered in the Southern central region compared to 2005 – BGN 8658 per decare.
The activity in the north-eastern region remained in 2006 as well – there was a total number of 14 394 decares of land sold at an average market price of BGN 20 967 per decare, which is an increase of 11% compared to 2005. More than half of all deals are made in the region of Dobrich where the average price is to the amount of BGN 17 000 per decare, and the highest price reported is in the village of Topola, namely BGN 25 000 per decare. The village is attractive for the golf ground under construction, which is situated near it, and the boom of the building of vacation complexes in the region of Kavarna and the region of Balchik. The prices in Varna and Byala are extremely high, as the maximum values per deals there have reached BGN 80 000 per decare.
The number of deals in the south-eastern region remains the same (1334) but the land sold has increased nearly two times, up to 12 326 decares. The average market price decreased by 11% in 2006 compared to the preceding year. The average price of the lands for non-profit purposes on the territory of the Municipality of Sozopol is the highest in the country, namely BGN 190 000 per decare. The maximum price reached in this part of the country is to the amount of BGN 300 000 per decare.
Monday, January 22nd, 2007
FOREIGN PROPERTY INVESTORS PURCHASE WHOLE VILLAGES IN BULGARIA
A new trend among foreign investors in Bulgaria is the purchase of whole abandoned villages and hamlets in the Rhodopi Mountain region. Investors planned to develop the villages into residential complexes of closed type, imoti.net said as quoted by mediapool.bg.
The advantage of such deals was that the property purchased could become separate administrative unit to apply for EU subsidy for developing a sparsely populated area. According to mediapool.bg the investors wanted to set up natural settlements where typical architecture and peculiarities of Rhodipian house would be preserved. The settlements had to be keep their natural outlook. Contemporary construction techniques would not be allowed.
Property agents said that foreign investor interest in Rhodopi villages began in the autumn of 2006. A demand boom for such property was expected in the spring and summer of 2007. Houses in the Rhodopi Mountain were offered for and average price of 160 to 170 euro per sq m, imoti.net said. The most expensive property wa located near Pamporovo winter resort.
Imoti.net
Tuesday, January 9th, 2007
Bulgarian property faces ‘oversaturation’
Bulgaria and Romania, which both joined the EU on January 1st, are predominately the hunting grounds of inexperienced investors looking to make a quick buck while the more savvy overseas investors look elsewhere, claims a leading property expert.
Investors have been wooed by media reports and heavy marketing campaigns extolling the virtues of the east for two years, but finding a dream property that will make your fortune within the space of a few months is highly unlikely, insists Rhiannon Williamson, co-owner of investment specialists Amberlamb.
“So many development companies have committed to both countries and such is the media promotion of investing in and Romania that both will remain of interest mainly to inexperienced buyers,” she said.
“It is apparently a well known fact that both countries offer cheap property and easy accessibility as well as massive tourism potential, and so an investor who bases his due diligence on what others are saying will flock to Bulgaria and Romania for at least the short term.”
However, in spite of rapid price increases in some parts of Bulgaria – sometimes as high as 30 or 40 per cent per annum – some of the more popular tourist destinations have seen oversupply of new properties, which have not been backed up by a strong residual tourist demand.
Brits investing in or may indeed experience fluctuations in their property’s fortunes, but they always have a strong tourist demand to fall back on; if their investment begins losing money, it is relatively easy to rent to foreign visitors.
Moreover, both these British favourites have strong domestic tourist demand. However, Bulgaria does not seem to have the same draw of its European competitors.
Ms Williamson explained: “In the most over developed parts of the coast mid-range property prices have remained stagnant for some time and until some quality stock is brought to the market this will remain the case… over development has ruined parts of Bulgaria and unless people are buying ’site unseen’ there will be few to fuel a saturated market.”
She insisted that in “certain areas of Bulgaria property prices peaked a long time ago”, citing on the coast and Bankso, a town in the heart of the country’s region, as examples of regions in dangers of “overdevelopment and reduced tourism appeal”.
Assetz.co.uk
Friday, January 5th, 2007
Bulgaria’s Corporate Tax Rate Cut
Bulgaria’s corporate tax rate has been cut by five points to 10 per cent, effective from the beginning of this month. Bulgaria’s parliament unanimously voted for the cut in October 2006, and it is hoped that the change will have the effect of boosting the country’s business climate and tackling tax evasion.
Bulgaria’s corporate tax rate was cut on 1st January 2007, when it joined the European Union. Bulgaria’s parliament decided on the move, which cut corporate tax by five points to 10 per cent, in October 2006 by a unanimous vote. It is hoped that this will give a boost to the country’s business climate, as the change will put Bulgaria’s corporate tax at one of the lowest levels throughout the EU.
Bulgaria’s Deputy Finance Minister Georgi Kadiev put to lawmakers that the new corporate tax rate would reduce budget proceeds in 2007 by an estimated 290 million Leva, or €148 million. However, he claimed the change would reduce tax evasion by tackling the grey economy, as companies would be less inclined to disguise their full income.
Kadiev added that as Bulgaria’s economy was progressing well, the estimated reduction in budget proceeds could be a lot lower than 290 million Leva in practice.
International Herald Tribune
Wednesday, January 3rd, 2007
Property Prices Up in Bulgarian Resorts, Despite Impressive Supply
Vacation property in Bulgaria appears to be inexpensive for foreign buyers and for wealthier Bulgarians, which leads to further price increases.
Despite the construction boom and intense property offering prices remain high, 24 Chassa daily reported.
Property in Bansko winter resort and Sunny Beach coastal resort registered highest price increase percentage. Imot.bg reported that investors have to spend now 20 per cent more on property in the two regions as compared to values for January 2006.
Bansko is the winter resort that offers most property for sale. A number of investors have also turned to Pamporovo.
Investors were mostly interested in two-bedroom apartments. Nearly 200 such apartments are offered for sale in Bansko. Prices have reached 919 euro per sq m. The price of luxurious property exceeds 1000 euro per sq m.
Sunny Beach is the leading summer resort when it comes to increase in property prices. Supply there is also high, compared to the offers in other coastal resorts.
Property agents said that the vacation property market in 2007 would not witness major developments, as a number of investors are expected to get involved with the construction of spa centres.
SofiaEcho