The property boom that started in Romania several years ago is shifting to Bulgaria, where land and housing is still far cheaper; this is the reason why Romanians flock here to buy especially holiday apartments. According to experts, property acquisitions by Romanians in the neighbouring country of Bulgaria exceed 3.6 million euros.
Increasingly more large-size investors are also interested in the Bulgarian property market that carries yields impossible to attain on the domestic market. In 2007, the 34% advance of prices on the Bulgarian market was one of the highest in Europe.
“In Bulgaria we could afford to buy a land plot for some 200 euros per sqm, whereas a similar plot in Romania would have cost us 1,000 euros per sqm” Daiana Voicu, managing partner with Willbrook Management International told the Capital magazine. Willbrook Management International is developing in Varna, on the Bulgarian seashore, a luxury residential project in an investment of 40 million euros.
A peculiarity of the Bulgarian legislation is that it makes a difference between the ownership right and the right to build on a land plot; under the current law, foreigners can buy buildings in Bulgaria, but not land. The situation might change in 2014. Due to its small size, the Bulgarian market is uninteresting for large-size companies that relocate their business to Eastern Europe.
Romania is preferred because it represents a larger market, but also because of its more elastic economy. According to a report by real estate consultancy firm CBRE Eurosko, Romania attracted in 2007 about 9% of the value of the deals arranged in Central and Eastern Europe.