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Investor's Data and AnalysisWe see a strong case for Bulgarian property prices growth to outstrip property price rises elsewhere in Europe over the next few years and therefore there will be a strong investment dimension to your purchase. Main economic indicators for 2003 (Economist Intelligence Unit estimates) Real GDP growth (%) 4.3 Consumer price inflation (av;%) 2.3 Currency fixed to the Euro. There are several facets to this assessment: Pre EU-accession growth | Consumer & Market Confidence | Price convergence | Bulgarians' homeowning instinct | Housing stock degradation | Credit OpportunitiesBulgaria has concluded accession negotiations with the European Union in 26 out of 30 chapters and is highly likely to be admitted in 2007. Progressively until accession, the Bulgarian economy will get stronger and property prices will firm up to reflect property's higher value to participants in the marketplace. confidence factors alone will play a large role. Spending confidence is beginning to surge after more than a decade of relative depression. Part of the spending by marketplace participants will be in property assets which will appreciate as a reslit, but an increase will also follow from a general appreciation. Most households have pent up demands for living space which may now, in a relatively stable expansion of spending and a budding lending sector, come to be satisfied for the first time. price convergence will plausibly precede economic gains to Bulgaria (e.g. in productivity and competitiveness). The price gap is wider in relation to immoveable property assets than in relation to consumable or durable goods and is likely to close quicker. Bulgaria has a very high rate of home ownership, which indicates the psychological importance to Bulgarians of owning the place they live in. In addition, many households live in unsatisfactory conditions as much of the Bulgarian housing stock is legacy from the period of Communist mass construction and housing programmes). In urban areas, where three-quarters of Bulgarians reside permanently, a substantial proportion of housing consists in low-quality prefabs. The ongoing liberation of opportunities is likely to reslit in movement away from the Communist-era residential districts and in a wider dispersal of housing into suburban and revived rural areas. This will undoubtedly keep the prices within such Stalinist areas permanently depressed but is likely to cause a steep rise in prices elsewhere, as a wholly new class of residential developments emerges. The successfli current reform of the financial services industry will contribute to price rises and growth in the real estate market. Bulgarians have never previously been able to make use of the system of mortgage financing when purchasing property, and as a reslit, have depended exclusively on savings to do so. Mortgage products have become widespread over the previous year and are going to be increasingly marketed by the banking industry, which is now mainly owned by foreign retail banks and therefore has easy access to advanced know-how in marketing and establishing mortgages. These assessments depend on factors which relate to the general state of the Bulgarian economy (including macro indicators) and on factors specific to the housing propertyReports and data on the property market in Bulgaria and Eastern Europe
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