Property in Sofia on the rise

Bulgarian capital Sofia has been tipped to emerge from the shadows and is increasingly regarded as a strong investment opportunity.

That is the view of property analysts Property Secrets, who argue the city is benefiting from Bulgaria's new membership of the European Union – which has seen investor confidence increase.

Furthermore, while Sofia has frequently lost the competition with Bucharest and the Black Sea coastal areas in terms of attracting major real estate developers, this is now beginning to change.

The more established markets are presently either slowing down, as in the case of Bucharest, or are unattractive and risky, as in some of the saturated ski or beach resorts.

This has left an opportunity for savvy investors, argues Property Secrets.

Among the key features attracting buyers to the market is the potential for sustained growth, with the city potentially on the beginning of the long-term growth curve.

Property Secrets argues the market will grow at some 20-25 per cent in 2008 alone.

The arrival of international developers in the market is also a sign the market is not only developing - becoming more sophisticated and following international trends (both developers will build mixed use complexes, according to the current European trend) - but also an investor-attractive market.

The mortgage market is in Sofia is fairly developed for investors, especially when put in the context of an emerging market. Maximum loan-to-value ratios of 70-80 per cent are available and the choice of products is strong.

Capital gains tax in Bulgaria is relatively low, standing at 15 per cent, while rental income is taxed as personal income at a rate of ten per cent.

Chris O'Toole