Growth forecasts at property exhibition in Bulgaria
Bulgaria’s construction sector, backed by the strong domestic and external demand for real estate, is expected to have a stable growth of 12-13 per cent a year by 2010.
The forecast was made by Deputy Regional Development and Public Works Minister Dimcho Mihalevski at the opening of the Real Estate Expo (Imoti Expo) exhibition in Sofia on April 27. The forum ended on April 29.
The same growth rates were predicted by the Bulgarian Industrial Association about a month ago. According to specialists, in 2003-2005 the increase in construction was 18-18.3 per cent.
The construction boom will concern not only residential, but also industrial real estate. The trend would give a thrust to development of the construction sector itself, Mihalevski said.
Real Estate Expo is the leading and largest international real estate trade show in Bulgaria. It was launched in 2004, following the dynamic processes in the real estate market and increased demand in real estate.
More than 120 exhibitors, including builders, investment funds, property brokers, financial and banking institutions and others, presented more than 400 development projects and other offers at the Inter Expo Centre in Sofia.
Housing remains the leading segment, but the share of second home holiday property and investment in hotels is also growing, participants in the exhibition said.
The segment of Bulgaria’s property market that will yield the highest return in 2006 is the multifunctional industrial zones, according to a survey conducted by the InvestBulgaria Agency released at the opening of the Real Estate Expo.
The development of industrial zones, which are forecast to return 12 per cent in 2006, will be a key priority for the InvestBulgaria Agency, its deputy head, Pencho Nenov, told the participants and the visitors of the forum.
The state will invest in the construction of the necessary infrastructure, said Nenov, pointing to the support that has been extended to the industrial zones in Kuklen, Rakovski and Rousse and to hi-tech park Opticoelectron in Panagyurishte (central Bulgaria).
Hotel developers are shifting towards the three- and four-star segment. The market share of three- and four-star hotels in Bulgaria rose from 50 per cent in 2002 to 67 per cent in 2005, it was announced at the exhibition.
Ample supply of office space is expected to bring down rental rates with 2006 yields likely to come in the nine to 11 per cent range.
Bulgaria’s property market swallowed over 250 million euro in foreign investment in 2005, which was 12 per cent of the year’s overall foreign investment influx, said Nenov.
The interest towards the development of the sector and the opportunities it presents was demonstrated at Real Estate Expo by banks and financial institutions, which occupied more than 10 per cent of the exhibition area, offering various forms of financing and products.
Three banks showed an innovative approach in extending mortgage credits, thus riding the public interest towards the exhibition.
The clients of Societe Generale Expressbank will be able to receive a euro-denominated housing loan with a 15-year repayment term and a promotional interest rate of 5.9 per cent, the bank announced during the exhibition.
No management and application processing fees on the loan have to be paid.
Loans will be extended for the purchase of residential property, home repairs or finishing works. The bank provides up to 80 per cent of the price of the property and offers possibilities for partial or full pre-term repayment. No limits on the maximum amount of the loan have been set. The bank provides quick response to the loan applicants.
Postbank said it would offer mortgage loans in leva and euro with a zero per cent interest rate for the first year. The promotional offer was be valid for candidates who applied during the Real Estate Expo.
The interest rate for the remaining period of the loan stands at 7.9 per cent. The bank also offered clients the convenience of choosing a scheme with a fixed interest rate for another two to three years.
And the commercial bank Allianz Bulgaria also offered mortgage credits with a 6.9 per cent interest rate to visitors of the Real Estate Expo.
The bank’s customers were allowed to repay their credits ahead of schedule without penalty charges, thus considerably reducing the price of their new homes.In early April, Allianz Bulgaria bank cut its interest rates to between 6.9 and 7.95 per cent, depending on customers’ incomes, participating amounts and the credit terms and collateral.
Source: Sofia Echo