Sofia and Varna to be next overseas hotspots

Monday, 05, Nov 2007 04:49

The Bulgarian cities of Sofia and Varna have been identified as potential overseas property investment hotspots by analysts PropertySecrets.net.

Strong demand in recent years has allowed the country to develop a robust financial sector, making investment in Bulgaria easier than neighbouring markets.

Yet, while these cities are expected to provide investors with good returns in the medium term, some areas of the country are best avoided according to the organisation.

"I think in the mountains and the coast it's already completely saturated and over-supplied," commented Simon Tweddle, chief analyst for PropertySecrets.net.

"I think the popularity of the country generally will subside a little bit but there will be more of a shift away from the coast and the ski-resorts and into the cities."

A recent boom in these areas is coming to a dramatic end, according to PropertySecrets.

Cheap material and labour in the Bulgarian property market allowed property to be built for a low cost, before being sold for ever increasing prices.

However, this market is now saturated.

"The likes of the beach and then the mountains which are completely over-supplied and are not an investment location at all, in my book," continued Mr Tweddle.

"You'll probably end up losing your shirt if you invest there."

Yet, buying off-plan in up-and-coming locations is a key trend in the Bulgarian property market.

"Most people are buying off-plan because with off-plan you know what you're getting, more or less," continued Mr Tweddle.

This is largely due to the convenience of new property.

"You can see the floor plans at home, you can see the pictures, you can see the location, whereas with the existing property you need to have it checked out a little bit more, you don't know if the room sizes are going to be right and you need to go and visit it yourself, which is a bit difficult for a foreign investor," explained Mr Tweddle.

"The majority of people buy off-plan."