Bulgaria Bucks Global Trend for Property Investment
February 05, 2008, Press Dispensary. As the world's strongest property market in 2007, Bulgarian property investment has made a huge €2.36 billion increase on 2006 figures and is successfully keeping up the momentum for 2008, according to global investment specialist Obelisk ( http://www.obeliskinternational.com ).
Bulgaria’s property investment has proven to be the country's economic driver, with a record-breaking turnover of €11.36 billion in 2007. Many local and international property experts predicted the year's increase to reach up to 30% but, by September the market had actually risen by 32% and many major cities, such as Sofia, are already recording impressive growth this year.
James Gonzalez, market analyst at Obelisk, comments: "The huge property price rise has been largely attributed to a good mortgage market, high annual property revenues and Bulgaria’s independence from the world financial crisis. The US sub-prime crisis hasn’t hurt the Bulgarian financial market as there’s no cross-border banking, and consumer borrowing is continuing to grow at a steady rate."
UK property investors, who accounted for 40% of all Bulgaria property investment in 2007, followed closely by Russian investors at 38%, have played a primary role in maintaining excellent market conditions, while further strengthening the country's financial stability and adding to the robust appeal for Bulgaria property investment.
Nikolin Gavrailov, President of the Bulgarian Entrepreneurial Chamber in Building, reports the turnover for the construction industry as €5.6 million and adds: "The (previous) lack of modern apartments, retail, and administrative buildings caused the construction boom. The investment growth in tourism, production and the need for modern infrastructure also stimulated construction. Construction sector growth is expected to be between 12% and 16% year-on-year until 2010."
Alongside such strong growth in property investment, the Bulgarian economy has experienced sustained growth with The Economist forecasting a consistent 6.4% GDP (gross domestic product) increase year-on-year. Bulgarian emigrant workers are also investing back into the country, particularly in the retail and housing sectors, which provides a further boost. According to preliminary figures from the World Bank, remittances from Bulgarians working abroad will have amounted to €1.26 billion in 2007. However, the Bulgarian National Bank has stated the actual figure to be closer to €2 billion or 7% of GDP.
James Gonzalez continues: "In a bid to ensure a consistent flow of foreign direct investment (FDI), the Bulgarian government has made bold changes to the Bulgarian tax system. The new system will mean that both income and corporate tax will be charged at a highly competitive 10%. This new flat rate applies to all workers, investors and companies regardless of income or profit values, making Bulgaria an extremely tax efficient place to relocate or invest in."
From July 2008, budget airline Wizz Air will be the first operator to offer cheap internal travel from the capital city to the coast of Bulgaria. The low cost airline will operate four domestic flights a week between Sofia and Varna, and will expand flight frequency to the UK, Italy, Germany, Spain and Turkey.
For more information on overseas property investment, and to find out about Obelisk's latest projects, please call 0808 160 0670 (UK) or 1800 932 514 (IRE), email or visit http://www.obeliskinternational.com
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Notes for editors
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