Rises in income levels and an
increase in domestic demand are set to result in prices of property in Bulgaria
rise by 5-6 per cent on an annual basis.
Thatââ¬â¢s the view of a leading asset management fund manager who believes
that smaller, stable price rises are more likely than the short-term explosion
in property values which hit the country in the early part of the 2000s.
Rises in incomes in Bulgaria driving domestic demand for property
Curtis M. Coward, CEO of the
Arceland asset management fund told the Sofia News Agency Novinite.com that he
believes that property prices in Bulgaria will see a stable 5-6 per cent annual
rise.
Coward, who is also a member of
the Bulgarian Land and Property Owners Association, believes that as the growth
in personal income in Bulgaria is faster than in many other European countries,
domestic demand for property will continue to increase.
Mr Coward highlights the proposal
of the Bulgarian government to increase the minimum wage by 12.5 per cent in
September 2011; ââ¬Ëan astronomical figureââ¬â¢ compared to most other countries.
Receding chances of EU accession to hit prices
On the downside, however, Mr
Coward believes that Bulgaria has lost some of its attraction with foreign
investors as hopes of a short term accession to the EU recede.
He said: ââ¬ÅThree years ago there
was a huge inflow of what I call ââ¬Ëhot moneyââ¬â¢ around the EU accession. People got very excited and
extrapolated that Bulgaria is going to become like the UK or something like
this… Not so fast! Probably too much money came in too fast.ââ¬Â
The CEO also believes that
Bulgaria needs to build more good quality residential property. He added: ââ¬ÅOver time, Bulgaria needs
more of everything – it needs more offices, more residential. Particularly
residential, especially in the big cities, and in Sofia in particular, because
the housing stock is generally in such poor condition.
“We think residential over
time is a very solid investment and we think that will continue for at least a
decade as well.ââ¬Â
