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Bargain Basement Property In Bulgaria’s Sofia

It's no secret that Bulgaria's property market was over-hyped, over-priced and over-sold, but did you know that there are actually still pockets of the country where it still makes sound investment sense to buy a property?We're mainly talking about Sofia, the capital of Bulgaria where the government currently has significant infrastructure investment plans, and where business is continuing to boom.Sofia benefited from the fact that it was starting from a low base point in property pricing terms - and it advanced significantly as all the hype flowed about Bulgaria's real estate prospects. But now that the nation has been impacted by the credit crunch and an undermined economy, so prices are falling in the capital and it's possible to find bargain basement property in Bulgaria's Sofia that may make a sound investment for the future.Bulgarian banks are not lending, anyone who wants to get on the property ladder or advance their home ownership status in the nation is struggling to secure finance. The situation mirrors that in multiple nations throughout the world. Naturally this has significantly undermined the property market across Bulgaria, but it seems that the capital city has been particularly impacted. Property prices in Sofia have fallen by as much as 20% since November 2008 according to DeltaNews, with the districts of Lulin, Nadezhda and Levski most acutely impacted. But opinion about the future direction of the market is notably divided. Some agents believe that there is room for a further 20% reduction, whilst others point out that there remains intensive demand for accommodation which should result in a normalisation and a return to strength in the near-term.We are relatively pessimistic when it comes to Bulgaria, it has to be said. So we can foresee prices falling further simply because this global credit crisis is not going to go away over night. Bulgarian banks are not going to start lending again anytime soon, they are not able or willing to buck the global trend. Additionally, those who do want to buy and who can secure the means will be watching the market closely and not wanting to enter it before prices have bottomed out.In the meantime, the government of Bulgaria has just announced a USD 3.69 billion investment programme to facilitate employment, encourage ongoing inward investment and improve the prospects of the country. The government is acutely aware that it has to make some significant moves if it is to remain attractive for potential foreign direct investment. For property investors this is the most significant news to come from Bulgaria in months.The investment will be targeted at everything from airport upgrades to new equipment for hospitals, from the development of schools to the improvement of overall infrastructure for business and residential use. It will bring almost 20,000 new jobs, and transportation is a particular focus for this investment which may well encourage more businesses to consider adopting Bulgaria as a base for their European or Eastern European operations.All of this will eventually have a positive knock on effect on the property market in Sofia - where there is already strong demand for accommodation. An investor who targets a purchase now, who negotiates a discount on already heavily discounted base prices, who holds for the long term, rents out in the meantime and is in no hurry to realise gains will be best placed to take maximum advantage from the rebounding in Sofia's fortunes that must almost inevitably follow.