Post by Bozur on Dec 15, 2007 21:19:39 GMT -5
Balkan boom: Bulgaria and Romania real estate compared
thediplomat.ro — While Bulgaria’s residential market could soon become saturated, Romania’s remains the more expensive option.Tahi Ali, managing director at Bulgaria Revealed and Romania Revealed property agencies, believes some areas south of the Danube are overdeveloped.More… (Business & Finance)
------
Reaching saturation point
How does the Bulgarian market compare to Romania?
While Bulgaria’s residential market could soon become saturated, Romania’s remains the more expensive option.Tahi Ali, managing director at Bulgaria Revealed and Romania Revealed property agencies, believes some areas south of the Danube are overdeveloped.
“Sunny Beach on the Bulgarian Black Sea coast has proven to be catastrophic for some investors who bought recently,” he says. “They are struggling to achieve decent rental yields as there is an oversupply.”
According to real estate developers Willbrook Management, the areas with the best investment opportunities in the two countries are the coast and the capital, but in Romania costs are higher. “You can buy a 75 sqm, two room apartment in Varna for 45,000 Euro, where in Constanta the same type of apartment will cost 58,000 Euro,” says managing director Daiana Voicu.
“For buying, the real estate market in Bulgaria is more attractive, but profits in Romania are superior compared to other central and eastern European countries.”
Like in Romania, the Bulgarian office market is expanding. The biggest office transaction in Bulgaria was the purchase of Sofia Business Park for 180 million Euro from German company Lindner.
This is similar to Romania, where Austrian investment fund Immoeast purchased shopping complex Polus Center in Cluj-Napoca for 210 million Euro from Trigranit. Unlike Romanian companies which decide to rent office space, Bulgarians prefer to buy.
“The offer for office spaces for sale in Romania is still low and is easily and rapidly absorbed,” says Silviana Badea, broker at Colliers Romania.
Retail is on an upswing in Bulgaria, with four shopping malls opened in 2006, three of which were in Sofia.
Names present in Romania such as Marks & Spencer, Carrefour, Ikea and Zara are looking to Bulgaria, according to Landmark Property Bulgaria.
A new master plan was approved for Sofia that came into force at the end of January to set clear rules in the height, types and density and zoning of buildings.
“In the past, there have been some loopholes in the legislation that have provided opportunities for witty developers to build higher buildings than the standard or even building in the parks and green areas,” says Tanya Kosseva-Boshova, executive director at Landmark Property Bulgaria. “The master plan is not perfect, but the administration is willing to listen to the business to make improvements.”
Unlike Bucharest, which is moving towards the north, developers are looking for land all around Sofia.
The proximity of Vitosha mountain resorts, only 30 minutes away by car, made developers build residential projects on the outskirts of the capital.
The average price per sqm for a property in Sofia starts from 1,200 Euro to 1,800 Euro at the higher end and between 650 and 850 Euro at the lower end. 70 per cent are bought off-plan by foreigners from UK, Ireland and Scandinavia looking for speculations, ski and spa resorts. In Bucharest luxury prices are similar, with middle class residences trading at between 1,000 and 1,500 Euro and the top end at 1,850 Euro per sqm plus VAT, according to the residential department of Colliers Romania.
Current legislation allows foreigners to buy freely in Bulgaria and take out mortgages, but land purchase is conditioned by establishing a company in the country. While, according to Radu Rafirou, tax adviser at Norr Stiefenhofer Lutz, Romanian resident EU citizens are entitled to acquire land in Romania starting with the date of Romania’s accession to the EU. Romanian residents are deemed to be those citizens who “have the right to reside in Romania.”
EU citizens who do not qualify as Romanian residents are entitled to acquire land in Romania only after 2012.
Mihai Alexandrescu
www.thediplomat.ro/real_estate_0407.php#B