Bulgarian property bubble
Encyclopedia
There were rumors and speculations regarding the existence of a property bubble in Bulgaria
since at least 2006, however many interested parties (especially banks) tended to discredit such a possibility. Most of all, since the property bubble has been the driving force in GDP growth in Bulgaria most players in the market, including government have been satisfied with the situation.
Provided that growth in GDP continued and that property prices had been sustained during the Financial crisis, there was a possibility that the growth of the bubble would return in late 2009, or early 2010. However since October, 2008
there has been sharp drop in the real estate market, including but not limited to:
Among other reasons the current property bubble burst, there is the factor of increased interest rates and bank requirements to provide mortgages, which were part of the reason why the previous conditions of late 2005 and early 2006 had provided for easy access to loans for many Bulgarians.
It may be accurate to say that the beginning of the bubble burst occurred somewhere around July-August 2008, however the visible tipping point is October 2008. Analyzing several different sources, including media, several online portals and property experts, the burst was long expected, and the Global Financial crisis was only the catalyst of events, since most financial institutions in Bulgaria are foreign investments.
The contribution of foreign investment to the Bulgarian property market has been significant. In 2006, more than 29% of property deals were signed by foreigners, more than half of whom were UK citizens. Various companies, such as Bulgarian Dreams
, actively marketed Bulgarian properties to buyers overseas.
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
since at least 2006, however many interested parties (especially banks) tended to discredit such a possibility. Most of all, since the property bubble has been the driving force in GDP growth in Bulgaria most players in the market, including government have been satisfied with the situation.
Provided that growth in GDP continued and that property prices had been sustained during the Financial crisis, there was a possibility that the growth of the bubble would return in late 2009, or early 2010. However since October, 2008
October 2008
October 2008 was the tenth month of the leap year. It began on a Wednesday and ended after 31 days on a Friday.-International holidays and other major events:* October 2 – Gandhi Jayanthi India* October 13 – Columbus Day in many U.S. states...
there has been sharp drop in the real estate market, including but not limited to:
- lower number of property buyers
- considerable drop in property prices
- sharp decrease in property sales
- many real estate companies have closed or temporary suspended operations
Among other reasons the current property bubble burst, there is the factor of increased interest rates and bank requirements to provide mortgages, which were part of the reason why the previous conditions of late 2005 and early 2006 had provided for easy access to loans for many Bulgarians.
It may be accurate to say that the beginning of the bubble burst occurred somewhere around July-August 2008, however the visible tipping point is October 2008. Analyzing several different sources, including media, several online portals and property experts, the burst was long expected, and the Global Financial crisis was only the catalyst of events, since most financial institutions in Bulgaria are foreign investments.
The contribution of foreign investment to the Bulgarian property market has been significant. In 2006, more than 29% of property deals were signed by foreigners, more than half of whom were UK citizens. Various companies, such as Bulgarian Dreams
Bulgarian Dreams
Bulgarian Dreams was a UK-registered property sales agent, specialising in the sale of off plan properties in Bulgaria to buyers mainly from the UK and Ireland. It operated from several offices with headquarters at 120 Moorgate, London, UK, EC2M 6SS...
, actively marketed Bulgarian properties to buyers overseas.