do you know how long the winter / snow season is in bulgaria? and if things are going like the way as suggested in the article, how much do you think the apartments in bansko can be worth by 2009?

how much do you think the apartments in bansko can be worth by 2009? - IMHO up to 50% less then some "investors" paid for them. What do you think?

• The economy continues to grow strongly but it is driven more by consumer spending than investment. The economy shows signs of overheating.
• Food prices pushed inflation into double-digits since August last year. The ballooning current account deficit is a key risk.

Growth has been very strong in the last couple of years in most of the Central and Eastern European countries. However, it looks like growth will slowdown in 2008 and in some countries the slowdown is likely to be quite sharp.
There are four sources of the slowdown in CEE growth. First, inflation spike significantly during espe-cially the second half of 2007 all over the region. This clearly contributes eroding consumers purchasing power and reduce consumption growth. Second, credit conditions have worsened in most countries in region both hitting consumers and investors. Third, property prices have turned south and are now declin-ing in a number of countries in the region. And finally the signs of a slowdown in old Europe are now clear and this is likely weigh on CEE exports during 2008.
All in all, the negative shocks to CEE are quite large and expected slowdown during 2008 is likely to be sharp. Unfortunately, it is the countries with the larger imbalances that have been hit the hardest by these shocks and in these countries the slowdown clearly is already underway. This is for example very visible in the three Baltic countries where retail sales have plummeted in the later part of 2007.
What we are now are seeing in the Baltic economies is likely to be repeated in most other CEE economies in the coming month, even though the slowdown is likely to be less dramatic. Some countries even risk negative GDP growth in the coming quarters. Negative growth is most likely to unfold in the countries where the negative shocks have been the largest and where imbalances are large hence countries like the Baltic states, Bulgaria, Romania and Kazakhstan.

Bulgaria booms despite credit crisis
By Theodor Troev and Kerin Hope
Published: November 9 2007

Home owners in many parts of the world have reason to worry about the implications of the international credit crunch. In Bulgaria they do not. Bulgaria’s residential property market is showing unexpected resilience to the impact of the crisis thanks to investment by east Europeans and increasing numbers of local buyers.

Interest from foreign investors remains high as they are aware that Bulgaria still has the lowest property prices in the European Union, says Michail Chobanov, chief executive of Sofia-based Bulgarian Properties.

The average household income for June 2007 was 614.09 leva, the National Statistical Institute (NSI) said.
This is an increase of 21 per cent compared to the same month of 2006, NSI said as quoted by investor.bg
Expenditure for June increased by 23 per cent on annual base, reaching 590.31 leva.
The average income per capita is 243.11 leva and the average expenditure, 233.69 leva.

http://www.directfromowner.co.uk/warnings_porkies.html
http://www.directfromowner.co.uk/nightmare.html

do you know how long the winter / snow season is in bulgaria? and if things are going like the way as suggested in the article, how much do you think the apartments in bansko can be worth by 2009?

The housing surplus is in the range of
12-14 percent in most countries with Albania (7%) and Montenegro (24%) being the two extreme
situations. In addition to housing surplus, most of the countries have high vacancy rates--as high
as 24 percent in Bulgaria and between 10-14 percent in most of the other countries—which
demonstrates inefficient use of the housing stock.
The distribution of the housing stock by tenure category is characterized by a reduced share of
public housing stock and a predominance of owner occupied housing. In most of the countries
across the region, owner occupation exceeds 90 percent, which is well above the 60 percent
average in the EU.
Despite the economic and social hardships, most households in South East
Europe have mortgage free housing. In some buoyant markets this translates into substantial
wealth 10-12 times the average annual household income.
Notwithstanding preferences for
homeownership, most households in South East Europe overwhelmingly do not have the income
and savings to purchase a home. Low wages and employment uncertainty coupled with escalating
housing costs and mortgage rates have reduced effective housing demand.

Besides the low level of housing market activity, there has been an even lower
level of mortgage finance in most reforming socialist economies.

It must be Underlined that Bulgaria's current Dwelling stock can largely meet future demand. The quality and quantity of future housing are crucially dependent on the way in which present stock is preserved.
The available statistical data indicate that existing dwelling stock is new, of reasonably high standard and has acceptable amenities.

The natural increase rate (difference between births and deaths per 1 000 persons of the average annual population) is minus 5.1 in 2006

Bulgaria's population has dropped by 1 million to 7.7 million since the end of communist rule in 1989, a nearly catastrophic decrease in such a small country.
The Balkan state, which joined the European Union in January, has the lowest population growth rate in the 27-nation bloc, according to figures released by the National Statistics Institute on Friday.
If the trend of emigration and a high mortality rate continues, Bulgaria could lose a third of its population in a few decades' time, experts said. According to an analysis by the Washington D.C.-based Population Reference Bureau, published earlier this year, Bulgaria's population will decline by 34 percent from 2005 to 2050, falling to 5 million people.
Despite a steady economic growth of more than 5 percent in the last years, living standards in Bulgaria remain low. The average monthly salary is the equivalent of EUR180 (US$240), and 9 percent of the work force is unemployed, prompting many to seek jobs in other European Union countries.
The country's natural growth rate - the difference between the number of births and the number of deaths per 1,000 annually - stood at minus 5.1 per 1,000 in 2006, the lowest in Europe.
Bulgaria's birth rate decreased from 12.1 per 1,000 in 1990 to 9.6 in the same year - comparable to the rate in Greece, Hungary and Italy. But the mortality rate stood far above the European average at 14.7 per 1,000 in 2006, compared to 8.4 in France and 6.6 in Ireland.
Some 113,438 deaths were recorded in 2006, compared to only 73,978 births.
The current life expectancy is approximately 69 years for men and 76 for women, while the average age of the population stood at 41.4 years. - Pravda.ru

Two very powerful rumors fire up the market. First, Bulgarians are made to believe that by 2007, the presumed date of official entry into European Union, real estate prices should match those in Central Europe, e.g. Hungary, Czech Republic or Poland. Following this rumor, which has no real foundation whatsoever, prices in Sofia should double or even go higher in the next two, two and a half years. Even if such rumor has no economic foundation, the very fact that buyers believe in it means they see the current price levels still as good deal. Second, private banks believe, also without any reason, that 2007 will open the internal market for new competitors from EU. They will offer mortgage loans at 3-4% instead of contemporary 8-9%. For them it's "now or never" to fish for homebuyers.

These two rumors nourish each other. The higher prices go, the lower mortgage rates fall. The lower the rates are, the more potential buyers go to market. The higher the demand, the higher prices go. The higher the prices, the more people believe in these two rumors. The result is almost doubling of the prices in Sofia and Varna since last September. People prefer paying $500/sq.m now even with higher mortgage rate than wait until 2007 and pay $1,500/sq.m as rumors make them believe. Some banks have announced they won't condition the loans upon the household financial situation proof. Meaning people with ability to pay several monthly payments will get credits that ultimately will turn to be bad. Whether these credits are "good" or not good enough will show up within 1-2 years. Perhaps the general plan is to sell the house or apartments before the buyer becomes insolvent benefiting from the higher price. The last buyer will get the hot potato, which will occur when the market in mid-term starts correcting. We can expect this to happen within 3-4 years, maybe even earlier. What we have just described here isn't an illegal financial scheme, but its results will look like the NYSE crash after February-March 2000. But for the next year, perhaps two, the market will keep current direction, although it isn't sure whether it could keep the present pace of development.

Lending Growth in Bulgaria Hits 20% in Jan m/m
7 February 2008, Thursday
Domestic credits growth has hit a new record in January as compared to the previous month, local credit consultants said.
Data of Credit Center shows that the average size of the credits drawn out in January 2008 were worth EUR 46,800, marking a 20% increase over December 2007.
Mortgage credits drawn out in euros continue to form the biggest chunk of the loans, accounting for 78% of the total in January.
Mortgage credits with maturity of up to ten years are becoming less popular and account for just 10.63% of all loans in January, Credit Center said.
At the top end of the ranking are mortgage loans with maturity of 20 to 25 years and an average monthly instalment of BGN 700-800. These account for 31.9% of the total loans in January.
Half of Bulgarian mortgage loans borrowers are aged between 25 and 35, making this group of the population the most active users of the banking service.
Experts partly attribute the growth in lending to the rise in households' incomes, more than 40% of which grew from BGN 750 to BGN 1 500 on average in the first month of the year.

Bulgaria has one of the world's highest rates of property ownership and tops the chart in Europe, an ERA Bulgaria study shows.
A total of 94 per cent of Bulgarians owned property in 2006, marking an increase of 3 per cent over the previous year, according to the study of international real estate broker network ERA that compared data from seventeen European countries.
Another 60 per cent of Bulgarians own more than one property.
Cyprus and Spain follow Bulgaria in ERA ranking with 85 per cent and 84 per cent of property ownership respectively. At the bottom of the table comes Switzerland with 37.2 per cent.
Europe's average rate of property ownership stands at 68.9 per cent
Teodora Dimitrova, head of the Bulgarian branch of ERA, commented that the high rate of property ownership is a powerful engine for the market, because it boosts the potential for selling and buying real estate.

HOMEOWNERSHIP
Bulgarians have one of the highest homeownership rates in the world (94%). This explains why, in the long-run, domestic demand will continue to be the major driver of overall residential property demand.

Rental incomes on the Black Sea coast have been lower than expected, according to investors. “Estate agents talked about a six-month season and yearly returns of 6-8 per cent. The reality is more like three months and under 3 per cent,” said David, a Dubai-based IT worker who bought at Sunny Beach two years ago. He declined to give his full name.

This low rental yield is the main reason I avoided Bulgaria.

WHERE ARE THE RUSSIANS GETTING ALL THIER MONEY?

I'm hearing they are also buying in Morocco in quite large numbers, indeed the developer Im buying from has added Russian language sections to thier sales blurb and web site.

28 February 2008, Thursday

Balkan Travellers

A sharp fall in the demand for smaller studio and one-bedroom apartments of between 40 and 60 square metres in Bulgaria's traditional Black Sea resorts, has pushed down prices by between 8 and 12 per cent in the past six months.

Now the prices vary between 800 and 1,200 euro per square metre in new developments, depending on their proximity to the beach, real estate agents announced, quoted by The Financial Times.

The newspaper claims that while British and Irish buyers are gradually losing interest in property on Bulgaria's Black Sea coast, they are being promptly replaced by wealthy Russians and Romanians.

Not everyone considers the slow-down of this market as a negative trend. Its immediate consequence will be a slight hold on the rushed overdevelopment, recently observed on the coast, and probably, as BalkanTravellers.com reported, its replacement with more sophisticated projects.

The highlight amongst them is the Black Sea Gardens project, which will reportedly be carried out by the renowned architect Norman Foster.

BIA warns of bankruptcies in real estate sector
12:29 Tue 11 Mar 2008 - www.propertywisebulgaria.com


The management of the Bulgarian Industrial Association (BIA) has warned that the country's real estate sector and related industries should brace themselves for a chain of bankruptcies in 2008, which could affect the gross domestic product growth.

Real estate market is saturated, Bulgarian news agency (BTA) quoted BIA chair Bozhidar Danev as saying. There were more than 20 000 unsold holiday apartments in Bansko and another 200 000 along Bulgaria's Black Sea coast, all of them built with bank loans that needed to be repaid, he claimed.

Intercompany debt at the beginning of 2008 was roughly 100 billion leva, according to BIA estimates, which assumed that debt maintained its annual 20 per cent average growth rate from previous years.

The figure exceeded 81 billion leva in 2006, but was only 34 billion leva in 2001. The combined value of the intercompany debt exceeded Bulgaria’s gross domestic product by 65 per cent, Danev said.

TO THE EDITOR: Bargain Bulgaria: The return of darker times
15:00 Fri 04 Apr 2008


Cut through the media and political hype and the truth is blatant: Bulgaria’s economy is in danger of another crash.

Credit rating companies don’t tell lies; politicians and brokers often do and if this worst-case situation becomes a reality in the near future, everyone will lose out, but none more so than the average Bulgarian family, who was just starting to feel the positive effects of development.

The past few years have seen a boom in the Bulgarian economy caused by stable political and economic trends and the push for European Union membership and driven by a combination of foreign direct investments in the real estate sector and an increasing flow of foreign tourists, etc. Bulgaria was described as “the new Spain”, luxury properties were constructed with lightening speed, new resorts created and cash poured into the creation of golf courses and yacht marinas.

The Bulgarian dream was about to become a reality, or so it appeared.

However, a bubble seems to grow every month reflected to the increasing budget deficit. In the year 2007 the deficit was 21.6 per cent of GDP going from 15.7 per cent in 2006. The imports are driving up the deficit. An 18.7 per cent increase in imports in 2007, while export only rose to 11.7 per cent according to the Bulgarian National Bank. Too many cars, too many goods and travels financed with loans and investment capital. This does not look good especially, when considering the meltdown of the property financial markets as a result of the sub prime crisis. Let us not forget the demand for increased pay, which in turn is fuelling inflation. Sadly lacking in this picture, are improvements in productivity and wealth generating infrastructure in tourism. We need a world-class tourism university in Bulgaria, a national strategic tourism development bank, new airports yesterday, we need hospitals, we need safe roads, we need super spa and wellness facilities, we need La Santa Sports Bulgaria, programme for national clean up of nature, we need first class theme parks, we need more golf courses like Lighthouse Golf Resort & Spa, we need top-class marinas, we need quality in the development of the skiing resorts, etc.

Niggling indicators indicates to a future fall in tourism and without swift action Bulgaria will maybe find that bargain-hunting tourists have gone elsewhere and that they have not been replaced by a wealthier class of visitor. They have no reasons to come here, when they can go to France, Greece and Spain, etc.

Bulgaria is becoming too expensive too fast, out-pricing itself from the mass market of package tourists. Instead of raising quality, it was busy raising prices, but giving nothing positive back to enhance the tourist experience. Like a cheap brand of aftershave, the scent of discount is overpowering in comparison to destinations like Greece, Turkey and Spain. The rubbish-strewn countryside, potholed roads and the high density, low quality development across the Black Sea coast and within the ski resorts is testimony to the lack of effort put in to raising standards in what could have been an exotic new destination.

Realistically the only card to play is tourism.

Lacking in oil, high technology, innovation, a high-class education system, biotech and the capacity to compete with aggressive Far Eastern production markets, Bulgaria was handed a window of opportunity to lift itself from poverty by creating a thriving tourist industry capable of taking the country into the next decade. Yet, the current decision makers and the Bulgarian business elite fails to seize this chance and shows incompetent national leadership and thoughtless, reactive marketing strategies to position Bulgaria in the competitive tourism landscape of Europe and indeed the world. The potential is still there, but it nobody in power is taking this fact seriously enough. The point is that we have to take put this on the top of the agenda, because the development of Bulgaria depends on it.

Even the EU is facing enormous problems in aiding the improvement of the country’s infrastructure because millions of EU funding is not easy to invest because of the tradition of corruption among the old generations of decisions makers.

In this instance local media is littered with examples and citing of extreme corruption and the hope of smashing this destructive behaviour is non-existent.

Bulgaria is still among the poorest of EU member states and it looks set to plummet further into the poverty trap before it is offered another opportunity for change.

May be when this happens, Bulgaria will – because of threat of poverty – be forced to implement a competitive strategy by, for instance, forming a consortium of responsible, principled participants – municipalities, organisations, municipalities, political parties, trade unions and private companies interested in implementing a long-term and sustainable national strategy to put Bulgaria at the top of the worldwide tourist industry.

The group should work fast to prepare a strategic action plan, to be introduced and implemented by a new generation of younger politicians more in touch with the modern world. This strategic consortium should be endorsed and financed by the EU or IMF, needs to be headed up by a top Bulgarian executive change manager, who currently works in the tourist market and should be a joint venture with one of the leading consulting companies like McKinsey and Partners, KPMG or PriceWaterhouseCoopers. Whatever strategy the group draws up, it needs to be cultivated, sophisticated and controlled. Let us find the path for Bulgaria that pulls us away from poverty.

Which Bulgarian leaders will lead the change?

Rene Rasmussen
Manager, M. Sc. Commercial Law & Business Adm.

British home buyers have disappeared from Bansko, a leading Bulgarian ski resort and until recently a “hot-spot” for people seeking moderately priced holiday properties.

Since the global credit crunch took hold, purchases by UK investors of Bulgarian properties priced between €45,000 ($65,000, £33,500) and €90,000 have fallen sharply, according to Sofia-based estate agents.

Hugh Fraser, of Sofia-based LS Property, said: “Our research suggests that only about 30 apartments were sold in Bansko last month and the buyers were Russians and Greeks.” This compares with sales two years ago of more than 500 properties a month to UK and Irish buyers.

Such a steep decline suggests Bulgaria’s holiday home boom, which has focused on Bansko and Sunny Beach, the leading resort on the Black Sea coast, may be over.

You over estimate their smartness !!!

Hi everyone,

I am from Scotland originally and have been very happily living in Bulgar 2300ia for the last five years. I am now thirty five years old and have been buying, renovating and selling properties (now on my 23rd project) since I arrived. When I arrived here with my wife, prices were certainly alot cheaper than they are at present but there are still bargains to be had (for renovation). I currently live in a 350 sq.m. three storey villa with 2300 sq.m. garden and swimming pool which I bought and renovated to this standard for the price of a terraced house in Scotland. I live near the wonderful medieval city of Veliko Tarnovo which has anything that I could ever want including new shopping malls, health spas, hundreds of high quality bars, cafes, restaurants, cinemas, theatres and opera house. I would thoroughly recommend Bulgaria to anyone and believe that people are far to quick to judge the country because of their one bad experience that they may have had due, probably to lack of information about where they decided to visit.

The Global Property Price Index stated recently that Bulgaria has the highest increasing house prices in the world currently with increases of 30% year on year. Smart investors did buy at least four years ago and are now reaping the benefits of their investments, however, this is not to say that there are no good investments to be had. In fact, 34% of British expats living in Spain are now relocating to Bulgaria to enjoy the lower prices while still having the same quality of life. Bulgaria offers everything in one small country from Skiing to sunbathing by the sea to relaxing in a mountain health spa with natural hot springs.

Don't believe everything that you hear from people who think they know Bulgaria because they have had one bad experience here. You could go to any country in the world and have one negative experience. You can also be robbed, conned and murdered in any country in the world if you are not street wise enough to know what to look out for.

I have never experienced any crime during my time in Bulgaria and the punishment here is severe which is a very good deterent against committing a crime (not like the holiday camp jails in the UK). Also, teenagers here are extremely well behaved and disciplined by their parents and are more likely to be seen riding their bikes or sitting sipping a cola in a cafe having a sensible quiet discussion than mugging old ladies and shouting obscenities to passers by while smoking weed and drinking buckfast.

In conclusion, I love the country and would never consider leaving for anywhere else, the people are great and so welcoming to foriegners even though they are generally poor people (especially in the villages). Highly recommended to anyone considering a new life in the sun.[color="#0000FF"][/color]