A couple years ago Bulgaria was riding high on the wave of the world wide property boom, but recently things have been going downhill. Property prices have been falling hard, and eastern Europe as a whole appears ready to implode. While all these negatives could lead many investors to run for the hills, some think that now is a great time to get in on the market.
The global downturn is having an impact on the commercial sector in Bulgaria but there is confidence in the long term future of the real estate markets, it is claimed.According to statistics released by Forton International, a Bulgarian real estate agency, there has been a decline of between 20 and 30 percent in some areas in Sofia and other major urban centers nationwide."The trend for rent level growth at the beginning of 2008, which was expected to remain stable, has in fact stalled and then slumped substantially," says the report."Some of the factors behind the decline are explained by the alarming slide in demand, and the subsequent heightened caution of customers due to the negative outlook of the economy," said Sergei Koinov, executive director of Forton International.But on the plus side it means that in 2009 potential tenants will have a much greater choice to obtain more spacious and better located offices for the same budget.The latest survey by the global consultant firm CB Richard Ellis says that tenants will benefit from cheaper prices, more attractive locations and greater choices.In fact the commercial real estate company is so confident about the market it has acquired a new partner in Bulgaria with the aim of establishing a stronger presence in central and eastern Europe.Colin Wadel CBRE director of central and Eastern Europe, said he expects the market in Bulgaria to be "vibrant and competitive." He added; "Bulgaria is a country of great significance in the region, with a very positive outlook for the long term future which will stimulate substantially the real estate market.""The company will diversify in all segments of the real estate business, with special attention being paid to hotels and hotel management," he continued.Although property prices in both the commercial and residential real estate markets have been falling there is confidence in the future with developers pushing ahead with projects. Since the beginning of 2009 there have been 190 construction projects approved for development.Around half of these are for infrastructure expansion and modernization as part of a five billion leva program proposed by the Bulgarian Government to battle the economic crisis with massive public spending.These public construction projects vary greatly in nature and size. Some permits are for railway stations, others are for road sectors in need of renovation or expansion while others are for office buildings, small hotels and administrative centers.