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Foreign property investors who have largely deserted the Bulgarian real estate market are set to be lured as more loans are made available for overseas buyers.

The real estate market in the country has been in a bit of a slump since a large chunk of overseas buyers from Britain and Ireland deserted the country at the height of the global economic crisis and have not yet returned.

As a result of lack of demand many banks withdrew products specifically aimed at foreign property buyers but now they are keen to lend again, according to Tihomir Toshev, executive director of credit consultant Credit Center.

The banks are understood to be targeting potential borrowers from specific countries, especially Russians who are starting to buy again in the Black Sea coast resorts.

UniCredit Bulbank is one of the first to publically launch new mortgage products aimed at foreigners and Bulgarians working abroad. But there are conditions, most importantly that they loans will only be available for development projects financed by the bank.

About 100 000 Russians have purchased property along the Bulgarian coast, according to Yuri Salovyov, Russian general secretary to the Russian embassy in Varna.

Russians generally tend to choose property along large resorts on the coast, or the Bulgarian mountains, but they also settle occasionally for a quiet, rural way of life in small villages, the report said.

‘The great demand for real estate, which initially came from the UK and other English speaking countries, is being steadily replaced by Russian speakers,’ said municipal mayor Avren Todorov.

‘Many Russians are seeking to buy single family homes facing the seafront or flats in the cities, as many of them have decided to outsource their business to Bulgaria and move here permanently,’ said real estate agent Stefan Atanassov.

Meanwhile it has been revealed that hundreds of Brits who own property in the Buglarian ski resort of Pamporovo have failed to pay their real estate taxes for two years running.

The town mayor is trying to defuse a row with some officials believing that the owners are with holding the money while others think it is a misunderstanding.

Letters have been sent to about 600 British property owners with addresses in the UK, according to deputy mayor Georgi Pepelanov. ‘The letter kindly requests that they pay their taxes,’ he confirmed.

Russian and Spanish property owners have paid their taxes on time but the council is owed around 600,000 leva by British owners of a hotel in the resort.

Pepelanov said he believes it is not a deliberate evasion but merely a misunderstanding between the British owners and the companies managing their properties in Bulgaria.

Source:propertycommunity.com

Demand for smaller real estate in Bulgaria could increase this year as the number of small properties being built has fallen so much that there is not enough supply, it is claimed. Small studio flats priced at around €25,000 have been accounting for 34% of total sales in the country’s real estate market but few new projects are due for completion, according to property consultancy Address.

‘The supply of such types of studios is decreasing while new construction for the moment is rather dormant. This is likely to create a demand that is likely to surpass initial forecasts,’ said marketing manager Kaloyan Bogdanov.

Buyers are bargaining hard and in 87% of cases they are asking for discounts on asking prices. In the first three months of the year the average discount amounted to €3,000.

The agency sellers are being urged by banks to keep the prices high but have to make discounts if they want to sell or risk losing buyers. On average, the discounts amounted to about 5% of the asking price.

The real estate market shows no sign of recovery yet, the agency continued. It reckons that a mild rise in values in local real estate is not to be expected until the third, or perhaps even the fourth quarter of 2010 because of the economic situation.

Other agencies think that the bottom has been reached. Aristo is even forecasting a 10% increase in prices by the end of 2010. But according to agencies such as Foros, Colliers, Address and Bulgarian Properties, real estate values will continue to depreciate until the beginning of June. They reckon on a further 10% decrease followed by a stabilization in prices.

And according to Industry Watch, real estate values are likely to drop by another 10% due to the weak influx of foreign capital  and delayed bank credit  in Bulgaria and the fact there is no sign of foreign investors returning to the market.

Bulgaria was once a favorite of overseas buyers especially from the UK, Ireland and Scandinavia. From 2006 to 2008 foreign investment in Bulgarian real estate accounted for more than €2 billion while in the preceding three years it was about €300 million a year.

But since the global economic downturn  the flow has stopped. Real estate in Bulgaria’s largest cities and towns recorded an average decrease of about 28% in the third quarter of 2009, compared to the previous year, according to figures from the National Statistics Institute (NSI).

In light of the economic crisis in Bulgaria and rising unemployment, the number of potential buyers in the country is only likely to decrease throughout 2010.

Source:nuwireinvestor.com

To invest in real property is one of the most profitable businesses in the world. For one, real properties such as lands never depreciate; its market value keeps on appreciating as time goes by. Although real property investment is a wise business move, you must bear in mind that not all real estate property are worth investing. You have to consider a lot of things before you start putting out a sizable amount for your investment. You need to check the geographic location, the economic condition, peace and political stability of the country and of course, the area’s tourist policies. If you would search for a country which could positively satisfy the mentioned qualifications, The Kingdom of Morocco would definitely be one of the strongest contenders.

Ideal geographic location
For one, the Kingdom of Morocco is located along Spain, a major tourist destination country. Some tourists may drop by Morocco after or prior to their trip to Spain. Morocco is along the coast of Atlantic Ocean which makes the country ideal for water skiing, boating, yachting and scuba diving. Most tourists prefer to do their leisurely trips and vacations along beaches and if you would intensify your advertisement and strengthen your services including proper maintenance, investing on a property in Morocco would definitely deliver you a fortune.

Government supported tourism
The government of the Kingdom of Morocco recognizes the idea that Morocco is an ideal tourist spot. In support to this, Moroccan King Mohammed VI and the UAE have allotted enormous amount to largely improve the country’s tourism. A boost in the tourism industry would require higher rental accommodations and service payments. Morocco also offers attractive tax policies on real property investments to further entice real property investors.

Perfect economic policies
Morocco has also a free market policy which enables money to flow freely in the market. Varied goods available in the market make the trade even livelier. They also have an “Open Skies” policy which allows competition among airlines. This policy paves the way for lower airfare costs and further attracts potential tourists.

Invest wisely
Real property investment is a wise business decision. Since you will use the bank’s money to put up your business, you will not shell out that much to realize your dream business. The payment for your mortgage will also come from other people through payments for rental and services so in effect you will solely be the administrator and an onlooker as you wait for your business to prosper and wait for the return of investments. Although investing in real property is very enticing, you should still be wise in your actions especially that it involves money. Ensure that you would be buying a clean, legitimate real property with unquestionable tax records. There are ways to determine if the property is legitimate. One is by checking if the property is registered at the Moroccan Registry of Deeds and another is by dealing only with reliable on line real estate brokers.

Source: immobiliertanger.ma

Small studio flats, predominantly newly completed and priced up to up to 25 000 euro, are reportedly staging a strong comeback on the market, accounting for 34 per cent of total sales, Address real estate consultancy firm said on April 23 2010.

In the first quarter of 2010, nine per cent of all transactions were conducted with 90 per cent external financing, the agency said. “The supply of such types of studios (single room flats) is decreasing, while new construction for the moment is rather dormant,” the media statement reads. “Accordingly, this will likely create a tendency whereby in the next few months, the demand for the aforementioned is likely to surpass initial forecasts,” Kaloyan Bogdanov, marketing manager of Address, was quoted as saying.

The agency reports that in 87 per cent of cases, clients sought discounts from the initial price during transactions completed in the first quarter, and in most cases they were given these, with the average discount rate going at about 3000 euro. Owners were “urged” by banks to keep the prices high, but were “forced” to deflate them, make discounts or risk losing the deal. On average, the discounts allowed amount to about five per cent of the total price, with, of course, exceptional cases in which there was even a mild “increase” observed as well, the report said.

Overall, however, the decline in the market continues unabated with the agency citing “many transactions completed at very low prices”. Address reckons that a mild rise in value in local real estate is not to be expected until the third, or perhaps even the fourth quarter, because of the economic situation.

Whether the bottom of the pit has been reached or not, and what the future holds, is still highly debatable. Property agencies like Aristo, Yavlena and B&H, argue that the low point has already been reached. Aristo claims that come the end of 2010, there will be a 10 per cent increase in value, although they fail to specify where – in Sofia, or nationwide. According to agencies such as Foros, Colliers, Address and Bulgarian Properties, however, real estate values will continue to depreciate until the beginning of June. They reckon on a further 10 per cent decrease followed by stabilisation. According to Industry Watch, real estate values are likely to drop by another 10 per cent due to the weak influx of foreign capital and delayed bank credit in Bulgaria.

For the period 2006-2008, foreign investment in Bulgarian real estate accounted for more than two billion euro, while in the preceding three years it was about 300 million a year before the global economic downturn eventually constricted the flow of cash. Real estate in Bulgaria’s largest cities and towns recorded an average devaluation of about 28 per cent in the third quarter of 2009, compared to last year, the National Statistics Institute (NSI) has indicated. From Industry Watch, the estimation is that this is equivalent to a six billion leva loss sustained by all property owners.

Experts believe that the expected “flexibility” in the market, which will “save the sector”, resulting from the drop in prices, is unlikely to materialise. They also deem unlikely a sudden rise in purchases because people with unstable or insufficient incomes will opt to rent rather than buy. In light of the economic crisis in Bulgaria and rising unemployment, the number of such people in the country is only likely to increase throughout 2010.

Source:propertywisebulgaria.com

Bulgaria will revise up its economic growth forecast for this year as recovering exports bolster the expansion, Finance Minister Simeon Djankov said.

“The economic outlook is more optimistic now than it was at the end of 2009,” Djankov said today in an interview in Madrid. “We are likely to upgrade our economic forecasts in the next few days to something like 1 percent.”

Prime Minister Boiko Borissov’s government previously estimated the economy would grow 0.3 percent after a contraction of 5.1 percent in 2009 on dwindling investment and consumption.

The economies of eastern Europe, which grew at a faster pace than their western peers earlier this decade, are recovering from their deepest recession since switching to free- market policies 20 years ago. Fiscal deficits, exacerbated by state spending to help revive economic growth, rose last year to 6.5 percent of gross domestic product from 3.3 percent the previous year, the World Bank said on April 1.

“Unemployment is stabilizing, slowly falling, which is a positive development, and the mortgage market has been rising for a third consecutive month,” Djankov said. “These are all small positive signals.” Unemployment eased to 10.1 percent in March from 10.3 percent in April.

Euro Application

Bulgaria may start its application process for the European Union’s exchange-rate mechanism ‘within months,” depending on whether EU authorities put the country under their scrutiny for an “excessive deficit” after the government this month revised up its budget shortfall for last year, Djankov said.

Should the EU sanction the government for last year’s hidden budget gap, the Balkan country would apply for the pre- euro currency stability test “early next year,” Djankov said. Borissov’s government took over from the Socialists after elections in July 2009 and on April 9 uncovered a budget deficit of 3.7 percent of GDP for last year.

The European Commission will say that Bulgaria’s steps to rein in the shortfall are “adequate,” in their assessment of the country’s latest convergence plan, Djankov said.

The deficit this year may be 1.8 percent of GDP, Djankov said. Bulgaria’s budget deficit expanded to the widest in at least a decade in February as tax revenue fell because of declining imports. The shortfall more than doubled to 1.398 billion lev ($964 million) from 500 million lev in January.

On April 1, parliament approved 60 steps to raise 1.6 billion lev and narrow the widening deficit by the end of the year. The steps include the sale of minority stakes in companies and of greenhouse emission credits, cutting administration costs and raising taxes on gambling and insurance premiums.

The EU’s expansion to 27 nations since May 2004 requires new members to adopt the common currency after fulfilling criteria on debt, budget deficits, currency stability, interest rate convergence and inflation. Slovakia and Slovenia have already made the currency switch, while Estonia hopes to follow their lead next year.

Source: businessweek.com

According to leading international agent Knight Frank, luxury and prime property in Morocco, particularly in the cosmopolitan city of Marrakech, is in high demand from discerning professional investors and second home owners from around the globe, who are seeking a relatively lower-risk real estate investment in a country less affected by the recession than others like the UK and USA.

The Jawhar Resort, Spa and Private Residences – a luxury destination resort developed by Aerium Atlas Management and managed by Monte-Carlo SBM, the resort operator behind some of Monaco’s most glamorous casinos, restaurants and hotels – is an example of a new standard of real estate that is being created in Marrakech to cater to this burgeoning demand and is receiving significant interest from the international elite since its launch last November.

Morocco provides an exciting destination in which to invest in property, with buyers drawn to the country’s low property prices in comparison to Europe, the real estate appreciation prospects and the ease in which foreigners can own property. What is also attractive is the comparatively low cost of living, the extensive government investment in the tourism market, the creation of several tax advantages and the wealth of lifestyle benefits available.

The country has not been immune to the global economic downturn, but it has been far less heavily affected and has fared much better than the likes of other North African states, the UK and the USA. Following a visit to Morocco at the end of 2009, the International Monetary Fund (IMF)  has issued the property market a vote of confidence, highlighting that the country’s economic performance has remained solid.

Moreover, the High Planning Commission recently stated that Morocco’s economy will grow four per cent in 2010 and expects a rise of three per cent in foreign demand directed towards Morocco in 2010. This is combined with an increase in demand of non-agricultural sectors, which are expected to improve by 5.9 percent in 2010 compared to 1.6 percent in 2009. Inflation will be kept at two point three per cent in 2010, proving the stability of the Moroccan economy and the promise which the Moroccon economy holds for the near future.

A report for the African Bank for Development  – also known as the African Bank Group – highlighted that the exceptionally good levels of rainfall since last year brought 12% growth in Morocco’s agriculture sector, and steady growth in the construction and tourism industry has helped offset declines in other sectors. Crucially, the country’s financial sector has significantly improved in recent years and does not hold securities or loans in financial institutions or international investment funds affected by the subprime property markets.

The African Bank Group assistance strategy for Morocco is consistent with the government’s programme orientations and it aims at supporting efforts at enabling Morocco attain the Millennium Development Goals (MDGs) by 2015. The Bank is, in particular, focusing on public administration efficiency, the strengthening of governance, the upgrading of economic and social infrastructure, and private sector development.

Knight Frank’s international research department in London  has found that the residential real estate market in Morocco performed well, with home prices rising by 35 to 40 per cent in the five years leading up to 2008. Since then, prices dropped by up to 20 per cent in the early half of 2009 but have now stabilised and are forecasted to grow again.

At the top end of the market, there continues to be a sustained demand for super-prime residences and resorts in quality worldwide destinations, for properties priced above €2million. In Marrakech, the country’s leading tourist location, there is heightened demand for luxury, high-quality real estate, which is currently not being met by supply.

CBRE , the world’s leading commercial real estate advisor reports that investors in prime Moroccan residential property in 2010 may double their money within 10 years. Residential experts, Aylesford International  agrees with this forecast but are even more optimistic and believe that a prime property investment in Marrakech now, over a five year period, is likely to be extremely profitable.

The reason for this is widely due the Moroccan Government’s ambitious “Plan Azur”, a €2.2 billion masterplan to generate investment, high quality real estate and tourism to the Kingdom, which will in turn create a property boom in Morocco. The country is successfully evolving as an exciting investment market, positioned as a desirable cosmopolitan destination that will combine world-class holidays and resorts with cultural, fitness and eco-tourism.

A key example of the type of transformation which is taking place in Morocco is the creation of a new prestigious neighbourhood on the western side of Marrakech known as the Menara District, which is designed to cater to the exclusive needs of both domestic and international visitors.

The new district, which is set within the Menara arrondisement of the city is formed of three elements all framed by the world famous Menara Gardens. It includes the 14-hectare Jawhar Resort, Spa and Private Residences, which will incorporate the renowned glamour of Monte Carlo, The Four Seasons Resort and a mixed use development known as Les Terrasses de la Menara that will comprise of a new luxury retailed boulevard, with restaurants, offices, cultural and leisure facilities together with a luxury residential area and a boutique hotel At the heart of the district, a landmark museum is planned, which will be designed by one of the world’s leading architects and is intended to become an iconic facility within the city.

For discerning investors seeking a lifestyle and financial investment the Jawhar Resort, Spa and Private Residences offers the perfect opportunity. The Jawhar Estate (Jawhar means “Jewel” in Arabic), is an excellent example of the new luxury real estate being established in Marrakech which will meet the exacting needs of the world’s elite.

Scheduled to open in late 2011, the unique resort will offer a standard of luxury never seen before in Morocco and will provide 25 of the finest, new build private residences, a 93 all-suite 5-star hotel, a top gastronomic restaurant and one of the largest Spa’s in North Africa run by ESPA. It also will include the “8 elements” Wellness Centre, a revolutionary health and self-improvement concept, developed by Dr Nadia Volf, one of the world’s top specialists in acupuncture and neuropharmacy.

Prices for the private residences are still to be made available but are anticipated to be in the range of €2million to €6million Euros (£1.8m to £5.4m UK pounds / $2.9m to $8.8m US dollars)

Source: maghrebproperties.com

Spain experienced its second consecutive year of negative commercial real estate returns in 2009, while Germany and Switzerland remained relatively stable over the same 12-month period, according to Investment Property Databank (IPD).

Source: opalesque.com

Bulgaria was the country of choice for Russians buying real estate abroad in the first quarter, beating out warmer climes like Spain and Italy because of low prices and aggressive marketing, real estate agency DOKI said in a report.

It’s a title that Bulgaria has held for three years already. But while it used to be the destination of choice for middle-age Russians looking for vacation homes, Bulgaria is now turning into a haven for retirees looking for a cheap place to live away fr om Russian winters.

The aggressive advertising of Bulgarian property and comparatively cheap housing prices make the country extremely popular in Russia, said Alexander Pypin, head of analytical center GdeEtotDom.ru and a contributor to the report.

“It’s possible to buy a good property by Russian standards for 30,000 euro there,” he said.

The average Bulgarian property deal ran 39,000 euros (,000) during the first quarter, down 7 percent from last year’s figure.

Housing prices in Bulgaria dropped by 4.6 percent in the first three months of 2010 and by more than 28 percent since the beginning of the economic crisis, the report said.

In addition to the low prices, Russians buy houses in Bulgaria because of the friendly atmosphere.

Natalya, the owner of a small grocery store in Moscow, bought a house in Dabravino, a village 49 kilometers south of Varna, last year.

“Last year, my husband and I went there for a vacation for almost two months. This time, we plan to stay longer,” said Natalya, 64, who asked not to give her last name.

Natalya said most of her neighbors spoke good Russian and were very friendly.

“Almost every morning when I went to the terrace I found a plate of tomatoes or grapes. Neighbors who had a good harvest had shared with us,” she said.

Most Russians buying property in Bulgaria are 30 to 40 years old and visit the country on vacation for several weeks each year. Many of them lease their homes during the rest of the year, Ryzhkov said.

Despite the inexpensive property to be found in Bulgaria, many of the more typical Russian buyers are beginning to look elsewhere. According to the report, the Bulgarian real estate market lost more than 4 percent of its clients in the first quarter.

Bulgarian agents are putting their bets on a new type of client, however, which started arriving on the market late last year.

Nevertheless, those looking for a good deal in Bulgaria should make sure that they know what they’re getting into before taking the plunge.

Many Russian customers who don’t know much about Bulgaria decide to buy real estate based on information provided by real estate agents, who give misleading information on the terms of the deals, said Pypin, of GdeEtotDom.ru.

Those who live in their houses for just two weeks a year have to pay high utility fees — higher than those in Moscow — for the entire year.

And if they decide later to resell their houses, they may have a hard time finding buyers.

Taking second place on the report’s list was Spain, which caters to Russians seeking decidedly more expensive houses. Deals in the Mediterranean country ran on average at 149,000 euros (3,000) in the first quarter, down 16 percent from the year before, according to DOKI.

Spain was one of the biggest victims of the property price bubble that popped in 2007. Properties have fallen more than 23 percent since the start of the crisis and were down 1.8 percent during the first quarter.

Italy took the third-place spot by surprise. While historically not one of the top destinations for Russians looking for foreign real estate, Italy began searching for new clients in Russia after West Europeans stopped buying homes there because of the worldwide financial crisis, Pypin said.

The average home bought by Russians in Italy during the period ran 116,000 euros.

Other popular locations for Russian vacation homes include Turkey, the United States, Israel, the Czech Republic, the United Arab Emirates and Cyprus.