Sofia, Bulgaria
If you type “Sofia property” into your web browser, you will be inundated with ‘off plan’ properties available to buy in Sofia.
However, research conducted by Colliers International indicates that the supply of new residential developments in the middle and high end of the market has still not caught up with demand, though the gap is narrowing. This is excellent news for investors – there are returns to be made where ‘demand’ exceeds ‘supply’.
Investment
The research conducted by Colliers reinforces the belief that the most profitable sector of >overseas property investment in Sofia is the middle market, that is the sort of apartments that will be bought and rented by the emerging middle class in Bulgaria, such as accountants and solicitors etc. This sector is showing very strong growth due to the huge increases in the region of Foreign Direct Investment (FDI) and the hundreds of multinational companies that have set up in Sofia such as Nestle, Danone, Nokia and Cable and Wireless. Also mortgages are much more freely available and interest rates are falling so financing property purchases for the local market is much easier.
Location
In comparison to other European capital cities, the prices of property are much lower in Sofia and there is an all year round rental market by locals and people working for the multinational companies, making Sofia an ideal place for buying property abroad. Sofia Business Park, a modern commercial zone is host to many of these companies and will have over 30,000 people working there when it is completed in 2007.
Sofia is well located centrally in Europe and there are direct flights to it from all the major European capitals. The airport is close to the city centre and it is expanding to include a second terminal and more runways in anticipation of the low cost air carriers moving in. Over 2 million people came through the airport in 2005.
A city of character
Sofia’s centre has a European character with tree-lined boulevards and 19th-century Russian and Viennese buildings with balconies. You can get about on foot but the city also has a well-developed transport system with8 railway stations, a reliable and frequent bus service and an excellent ring road system.
The city also boasts a large number of parks and gardens and has Vitosha Mountain right on its doorstep. This is the highest ski resort in Bulgaria and is good for skiing in winter with over 120 days on the slopes. Vitosha Mountain will be one of the sites for the 2014 Winter Olympics, if Bulgaria is successful in its bid to host the event. In anticipation the ski resort is being extensively redeveloped with the assistance of specialist consultants. In summer, visitors and locals can enjoy walking and hiking.
In conclusion, Sofia with its young, working population, attractive location and low property prices with great year round rental potential is an appealing place for investment. Predicted yields for rental property in Sofia vary between 8 and 15%, according to different sources such as Latham Yeomans and Colliers, depending on location and extra services.
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