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
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