Eastern Europe maintains its status as one of the most attractive property destinations, though investors are becoming more skeptical about new offers on the market.
Many property companies turn to Southeastern Europe because of the high income return, Dnevnik newspaper reported. In comparison to London's return rate of five per cent, Ukraine's reached 15 per cent.
Investors worry whether the small Southeast European market can accommodate all the capital currently inflowing from foreign investors. One of the clearest signals on investor intentions comes from Bluehouse Accession Property, which plans to invest in Bulgaria, though the company might postpone its decision.
According to bankers the previous year Bulgaria accommodated foreign capital eight times as much as the national investment volume. Yet, Financial Times presents a negative development, since companies take loans to finance property construction. This financial decision eventually increases property prices and pushes down the return rate.
Some analysers believe the market would soon be saturated as the funds invested in the past 18 months tremendously exceeds previous levels.