By Ray Clancy
Property Community

Property prices in Bulgaria have fallen by an average of 40% in the first eight months of 2009, according to the latest published figures from the International Real Estate Federation.

But a look at the analysis in more detail reveals the full extent of the property crisis in a country that was once very popular with foreign property investors.

Prices on Bulgaria's Black Sea coastline have fallen by 15 to 30% while prices of properties further inland around the coastal area have decreased by as much as 60 to 70%, Valeri Vassilev of Imoti Bulgaria OOD revealed.

Vassilev told a news conference that the outlook is exceptionally gloomy and even bargain prices are not attracting buyers. No matter how much property prices fall, some would remain unsold for years, the conference was told.

However, Valetin Suikov, a member of the board of the International Real Estate Federation of Bulgaria, said that the market had reached break-even point and prices would not change much in the next two years but added that prices of quality real estate would not fall further.

Bulgaria has lost a large number of foreign buyers, particularly those from the UK and Ireland. But according to Vesselina Ivanova of Five Star Investments Russians and Ukrainians are still buying and a particularly interested in Black Sea property and in golf course developments.

Major problems facing the market include the complicated procedure for Russians to get Bulgarian visas and that fact that there are no direct flights from Moscow to Bulgaria's Black Sea cities of Varna and Bourgas outside the summer season.

But there is some optimism with the number of building permits issued in the second quarter of 2009 increasing but the trend is for smaller units. But permits are still down 61.4% compared with a year ago.

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