Real estate foreign investments - before and after the crisis

The trade for purchasing a real estate property as investments is intransitive. It only changes its dynamics and specifics in terms of property types and models of investment.

Before the crisis the country was rich in real estate investments, many of them were made by foreign entrepreneurs and investors.

According to the Bulgarian Investment Agency for the past 15 years, around40 billion has been invested in the country.

Between 2005 and 2009 a large amount of them were related to building , said Borislav Stefanov, Executive Director of the Agency during the Conference on Properties.

On the one hand, the market was greedy and there was a great interest for new and modern properties, as previously there was no market for such kind of properties.

Many speculative investors answered precisely to this demand. A lot of investors still remember with nostalgia the period during which you could sell and rent almost anything you build - no matter if residential or commercial buildings.

This let other foreign investments in the country - one of the factors that gave impetus to the Bulgarian economy and contributed to increase in consumers` purchasing power.

Before the crisis several major projects for the construction of shopping centers were announced, office complexes and multifunctional complexes for hundreds of millions of euro in, some of them worth over 500 million. For one reason or another, too many of them were never accomplished. There was an extreme demand for rural properties during this time as well. A lot of Englishmen invested precisely in this type of property.

Real estate and construction was one of the four sectors that generated over 80% of foreign direct investments for many years.

This situation has now changed. In recent years the structure of foreign direct investment (FDI) in the country was generally changed. In 2008 the main leading branches for investment were finance, commerce and real estate; last year telecommunications and energy have taken their place as well.

"The Bulgarian economy is getting out of the crisis"

Before the crisis, Bulgarian economy was developing faster than those in other European countries.

This also applied to the real estate market which was growing at a much faster pace. Our country was on top of the charts growth of housing prices for a few years. During the crisis, the market became unstable and more people were afraid to invest in real estate properties. The statistics during 2012 however shows reviving of the market and returning foreign investors` interest. At the moment the interest it not focused on rural properties. Customers prefer now investment projects, holiday properties or agricultural land.

Now the country supports for investments more targeted and focused on specific target sectors. It is awarded to projects for over 100 million leva for a period of three years. These are projects that really contribute to the Bulgarian economy by attracting capital or labour. This is especially applicable to projects in the areas of production, where a financial support can be obtained.

The available real estate investments are made primarily for completion of projects begun before the crisis. For the bigger ones, some companies were able to even receive bank loans.

There are few exceptions of entirely new projects - such as Paradise Center Mall in "Lozenets" which is about 100 million, and Sofia Ring Mall on Ring Road, with an investment of 100 million euros.