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 Bulgarian Property Market Heading For Bottomsville

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PostSubject: Bulgarian Property Market Heading For Bottomsville   Sun Nov 04, 2012 4:52 pm

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Bulgarian Property Market Heading For Bottomsville

During the (now not so recent) overseas property boom Bulgaria had its fair share of popularity. Indeed, in the run up to its EU accession in 2002 it was among the top destinations for overseas property investors to buy. However, as with so many of the early successes, it was a victim of that success and it became overdeveloped.

I remember researching the market in 2008 to value a 2 bedroom apartment in a newly completed Bansko ski resort so that its owner could set a suitable asking price. I found that the market was absolutely saturated with similar properties in the same area, and this was dragging down prices rapidly.

Of course, then it got caught up in the global financial crisis, and this only made matters worse. The fact that Bulgarian property prices were already in freefall when the crisis all but killed foreign demand led to Bulgarian prices falling among the farthest of any nation in the world.

But as we all know, falling prices are only bad for sellers, for buyers they present an opportunity, and if you can get in just as a market bottoms or slightly before, you can be in for some good gains, especially if a market has a v-shaped recovery.

No one is suggesting that Bulgaria is in for such a sharp recovery, but it is starting to look like a bottom has been found. Many Eastern European markets like Romania and Latvia never really suffered a recession, but their housing markets crashed. In Latvia prices fell by about 50%, but because the economy remained strong, once prices bottomed it enjoyed a rapid recovery, and the same was predicted for Romania. But of course, Bulgaria did suffer a recession, and this combined with the over-supply will almost certainly prevent a fast recovery in house prices.

However, one other thing that those markets have in common is that prices fell by about 40-50 per cent before the market bottomed. Now that prices in Bulgaria have fallen by 38% (as of May this year) according to the National Statistics Office, and the economy is on the turn, experts are starting to predict that a bottom for Bulgaria could be just around the corner.

According to the Bulgarian National Statistics Office annual house price index, house prices were down 21.4% in 2009 compared to 2008. In 2010 this decline slowed to 10.1%, and last year the decline was just 6.1%. Quarterly data from the same source shows the first slight quarterly growth in Q2 2012 of 0.2%, following a decline of 0.4% in Q1 and 1.5% in Q4 2011. In Q3 2012 prices declined 0.5%. This is hard from staggering, but it does support the theory that the market is stabilising.

Of course, this is nationalised data, and there are vast regional differences. In places like Bansko, where oversupply is great it will likely take a great increase in foreign demand, which will take a great increase in sentiment, which will probably take a turnaround in the EU debt crisis, or something of that magnitude -- I won't be holding my breath.

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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 7:08 pm

Quote :
And in the end, Bulgaria has absolutely no fault in what happens to appear as 'poor investments in Bulgarian property' - it's recession and property decreased in every single European country but Russia /not sure of Scandinavian countries and Switzerland, of course/.
Actually 40% average decrease in Bulgaria is nothing compared to 75% in Spain/Greece for some type of properties.

I have to disagree with you on this one, although there is a problem throughout Europe, I'm afraid the Bulgarian government missed the boat and yes there will be those who will blame others or reasons but it's a fact that Bulgaria missed the boat big time and they won't get a second bite at the cherry. Yes the Russians do have money to spend but there are also plenty in Europe that have the same but won't invest in a sinking ship.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 7:10 pm

Well, this is an example of a good investor - owns places, uses them, wants his children to use them - simply loves Bulgaria and understands that he can never buy same stuff in England for this money.

As per Plovdiv being car capital - no it isn't - cheapest cars are in Dupnitsa, Sofia and Vratsa area and of course, cheapest are the worst :)
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 7:12 pm

Brian1, government has nothing to do with free market and thanks god for that...
You have the right to be not right :)
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 7:20 pm

[You must be registered and logged in to see this link.] wrote:
Brian1, government has nothing to do with free market and thanks god for that...
You have the right to be not right :)

I didn't say the government controlled the market? but they are without doubt to blame for the very poor infrastructure that is here in Bulgaria which will effect the sales in Bulgaria, its not all down to market prices? Anyone who moves from one place to another will always check out the services etc regardless of the cost of property. I love it here and wouldn't want to be anywhere else but I would like things here to be 100% better than they are especially the hospitals and the major services let alone the corruption that most of us see on a daily basis either face to face or read about it at the top.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 7:48 pm

I would say that in times of heaviest crisis, Bulgarian government is building much more than any other previous government - Sofia Burgas highway will be fully ready by March, Armeec Arena sports centre, Burgas/Sozopol junction, Veliko Turnovo - Stara Zagora, lots of renovations to schools, churches, I would say this is not little...

As Prime Minister said about the crisis in Greece and Spain - they need to reduce their salaries and pensions to Bulgarian ones and then there will be no crisis for them... it's a fact that many countries spend more than they make.

Also, many infrastructural projects depend on local municipalities and how good they are in earning EU project funding - there will always be poorer and richer municipalities, at the moment Bourgas is booming, tomorrow it can be another area, for this to be improved - all people need to be combined and working for the better...

And let's face it - if we have 4-5 highways - Sofia - Varna, Sofia - Bourgas, Sofia - Greece, Sofia - Turkey, Romania-Varna-Bourgas-Turkey - it can't be still at 65 leva annual vignette. So if using them will cost more than a day's salary - noone will be using them.

No idea of health system in other countries, but my wife when pregnant spent a week in a 5-star hotel-like private hospital and paid 67 levs in the end - all nurses and doctors were very polite and really helped her. Yes - state hospitals are bad but now you have a choice of using private ones as well. Because of the new private hospitals, state ones are also trying to get better and doctors more motivated... this is a fact, I'm a witness.

If my friends living in the USA/UK are coming back to go to a dentist - it can't be that bad here.
Also, during pregnancy, we have friends living in UK and Germany where rules for birth are simply 'the fittest survive/nature knows what it's doing' while in Bulgaria they are meeting lots of doctors who know and do far more for pregnant women than in the above mentioned countries.

So, enjoy what you have here and be sure it will only get better.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 9:11 pm

A few roads don't make a country, from the outside looking in I would agree with points on both sides but there has to be moire to moving than the cost of buying a house which really has already been said. I'm sure that the so called important places in Bulgaria will have loads spent on them in order to impress the tourists and Brussels. Infrastructure is very important and so is health care and yes there maybe the odd dentist or even plastic surgeon that is good/cheap but again there is more to moving than this. Lets not forget that the Bulgarian government are amongst the most corrupt in Europe, yes there are those that are honest too but it always needs to start at the top and work its way down which will not happen in Bg for many years to come in my opinion. I agree that Bulgaria has missed the ship and I also believe it will be a very long time before another one docks. This is only my opinion as a potential buyer who has visited Bg several times and have researched for many years too.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Fri Dec 28, 2012 9:56 pm

All you say is right, but I've lived for 34 years here and I know better :)
Bulgaria is a poor country and it will always be. Ship has not been to our shores since year 1200-1300 - years during which most European countries existed under different names, parts of various empires or didn't exist at all.
If some property investors to you mean a ship... we are in trouble here :)
Things are getting better with infrastructure, with living facilities and even corruption...
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 12:21 am

[You must be registered and logged in to see this link.] wrote:
I agree that Bulgaria has missed the ship and I also believe it will be a very long time before another one docks.


Don't worry Prawler as this comment is only a 'figure of speech' nothing to do with ships and docks g

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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 7:02 am

Hey, I know what figurative speech is, what I meant was that Bulgaria was blooming for last time only before the Turkish occupation (1396), in other words we have never seen good times...
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 9:37 am

What a good and informative topic this is now becoming. I'm with Bgbazz and Prawler on this one. Buying to live in has been great for us. Buying to speculate is and always hasbeen a high risk business and depends largely on the luck of the markets. So many Brits who would not normally have the cash to buy abroad did this expecting to improve property and sell on at a profit as in UK. Bulgaria is not and never will be in my lifetime, like the UK. Several visits to Bulgaria without living here will not give the overall picture of life here. There have been some improvements in infrastructure and at the moment VT is going through tremendous road and flood development which means chaos for drivers and not a quick option but it will be good in the end. Marno Polo Park is a fantastic place for everyone and for events re-built with EU money. These are just two that I know of and I will defend Bulgaria because I have lived here for nearly 9 years and have integrated and learnt to love my life both the good and not so good. I bought what I could afford, made it more habitable for myself and not for anyone elses standards and have no complaints.
I am amazed at the comments on infrastructure really because I don't have a car and live 20minutes from town but I can use a village bus daily (even in the snow it gets through) and coaches to Sofia and the coast are regular, clean, on time and cheap.
I think the main reason for the downturn in sales to Brits is because they are getting too fussy and not realising that property is cheap here because Bulgaria is poor!
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 9:49 am

I can see some of what's been said here as being right and some wrong and maybe even some misunderstanding of others? firstly infrastructure doesn't only revolve around transport and roads, and if Bulgaria is so poor them where has all the money gone from the EU which is constantly under investigation which then brings us to the guys at the top and the corruption that seems to be a way of life in Bulgaria for quite a few. I am another one who loves it here and wouldn't want to live anywhere else but I don't wear blinkers and see everything through rose colored glasses nor do I only see the worst of |Bulgaria because there is a lot I love. I think what is meant here by infrastructure is there is very little services open to Brits for "
FREE"
(Tax paid) as they are in the uk and those that are available are usually substandard if indeed they exist? so I guess the simple way to put it is "
If you want a life they goes back in time"
then Bulgaria is for you.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 9:57 am

I agree with what you say too Davshaz and I don't see my life here through rosetinted glasses! I was so disappointed last year that I nearly left! That decision was not really about disenchantment with Bulgaria. I am probably very different to most on this forum in age and acceptance of life which doesn't mean I never complain. However, eccentric as I maybe, I leave it to others to get on their soapbox because my soapbox days are over. No-one listens to anyone over 30 these days. I do agree that loads of money both from EU and within Bulgaria goes missing and no-one knows where which is not right but I still maintain that no outsiders will fix this and I don't know the answer because it is too endemic and runs from top to bottom as you said.
However, we are discussing the downturn in the housing market and that, as far as Brits are concerned, could be because there is too much moaning about life in Bulgaria on forums and so don't see it as the paradise and land of opportunity that it once seemed.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 10:03 am

Quote :
because there is too much moaning about life in Bulgaria on forums

I could not agree more. This forum is friendly enough but some of the others seem to be full of people moaning and falling out. They don't do Bulgaria any favours as others read the threads and take them on board. Shame really has most of it tends not to be true.
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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 10:34 am

Thanks for your input guys loving this topic but lets not go with discussion re other forums T

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PostSubject: Re: Bulgarian Property Market Heading For Bottomsville   Sat Dec 29, 2012 10:36 am

[You must be registered and logged in to see this link.] wrote:
I think what is meant here by infrastructure is there is very little services open to Brits for "
FREE"
(Tax paid) as they are in the uk and those that are available are usually substandard if indeed they exist? so I guess the simple way to put it is "
If you want a life they goes back in time"
then Bulgaria is for you.
I think you should define what you mean... I am sure Bulgaria is much more friendly to Brits than Brits are to Bulgarians in terms of free services and social care... if you are reading the papers, you are now seeing that UK state are trying to stop opening labour markets for Bulgarians and Romanians... has anyone of you been hindered in working here, or kids going to school?

And by referring to 'where money from EU went', you need to know that so far Bulgaria has received around 2,3 billion euros, don't see how we can turn it into Switzerland with 2 billions, right? For the whole programme until end of 2013 we were entitled to up to 15 billion which, of course, will never be contracted due to lots of reasons including local corruption, fraud and inexecutable requirements from the EU.

And remember, Ireland took 20-30 years to recover and become a major force, no way you would expect Bulgaria doing this for first 7 years of EU membership. And also Ireland with 4.6 mln population received 40 billion, while Bulgaria with 7.4 billion is getting maximum 20 billion for 13 years of membership. And let's not forget 40 billion in years 1975 to 1995 are completely different from what they now worth...

Here is a little info:
Code:
Ireland began receiving subsidies after joining the EEC in 1973 when it was the community's poorest nation.
For 13 years the Irish economy was feeble, recording an average annual economic growth rate of less than 2% a year.
During this period, net receipts from the EU averaged 4% of GDP.
By 1987 Ireland's per capita income was only around 63% that of the UK.


But from 1990 to 1995 the Irish economy grew by 5% per annum.
And in the next five years it really took off, growing at more than 9% a year.

If you remember, Irish were against EU payback of debt in 2002 and there was a referendum about this. Luckily, they didn;
t do the mistake of stopping payments but they showed they were pretty ungrateful for the support.

If we say 40 billion up to 1995 are 80 billion now, you can imagine how nice life would have been in Bulgaria at the moment if we only got so much support as Irish and Greeks got...
In the end, as of 2011 these countries are again bankrupt while Bulgaria is in top 3 in financial stability with only 2.5 billion euros received and 2 billion due to be paid back as EU debt in 2013...

As I said in another post, Bulgarians are simply magicians, as no Greek or Irish person can imagine living on a 100 euro monthly pension.
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