Real Estate Investors Weaned off Russia, Head for Bulgaria

Right on, just what I’m talking about,

It’s happening and it will be happening.
I've never even doubted for a single moment that BULLgaria is a BUSINESS NATION!

I think the Russians have picked up some 5 years old promotional material for Sunny Beach.

Well George, do not stay in orbit too long, mother earth is calling you! The article does not say that Bulgaria is coming up as the favourite investment area. For sure Bulgaria used to be a traditional holiday destination during the Soviet period - it was cheap and unsophisticated , and most people could live with bad service and polluted water- they got what they paid for.
That might still attract some investors, but no one is surprised that Russian investors are interested in Cyprus, Greece, Turkey and Montenegro. These countries offer more developed tourism, better services and long and beautiful coastlines- and definitively better security for the investments. If the prices are levelling out between the countries, Bulgaria will loose its advantage as a cheap destination and will be chanceless in a fair competition. I would certainly wait before I declare Bulgaria a business nation that has a lot to offer the Russian investors. They might invest because Bulgaria is cheap and underdeveloped, but for how long?

The current tightening of the credit markets around the world is going to affect property in most of the world. I don't say for sure it'll cause a dive in property value in Bulgaria - but it sure won't help to keep pushing prices up. I think the net affect on Bulgaria's real estate market is almost completely unpredictable as so much of what happens to the market is influenced by investors from all over Europe. I suspect British investment will fall away as the credit crunch affects this country - but will Russian money come in to replace it?
I don't see it. It seems to me that Russian money is already there in the bigger investment schemes, and I don't see Russians coming in buying up the property in the same "micro" way Brits have. Their economy although much healthier does not have the same spread across many classes. They don't have the same volume of retired class looking to live in another country away from that Scots bastards taxation.

However, I'm often wrong. that's why I'm an engineer and not an economist.

There we go again, the Furia-nomics,

First of all I said it many times that the WORLD IS GLOBAL today, which makes any investment in the Balkans and the entire area/region highly welcomed and appreciated. This entire region/market is way to small to segregate, and it will be naive to think that any particular country will be able to accumulate any wealth without the cooperation or engagement of the neighbors.
Going back on a country level, the potential investors are interested in different things. The majority of the Russians for example will relate better to the Bulgarian culture and language which will definitely put Turkey in disadvantage. The other major differences giving advantage to Bulgaria were nicely presented to you, which are stats on crime, corruption, education etc. http://www.nationmaster.com/index.php
They all show Bulgaria compared to the neighbors as a better place with the exception of Greece. Well, what about Greece, main disadvantage price, secondary disadvantages considerably hotter climate, stone/gravel beaches and dry almost nonexistent nature (trees, plants etc.). Greece is by far the best developed country in the area but is a country which lags WAY BEHIND all other western European nations (except Portugal).
Like I mentioned earlier all investments in the area are EXTREMLY APPRECIATED and even though not large on size the region has very diverse package of choices for all types of investors.
Bulgaria happens to be in the middle of all and it will logically attract its fare share of investments stimulated by the recent tax cuts!

*Extremely
*Fair share
Etc…

Do not be ashamed, Hairydave, you have some very good arguments there. I have also said a lot of times that the Bulgarian property market is overheated by the wrong reasons. The offers are substantially higher than the demands in Bulgaria, but the realestate agents and the authorities are desperately trying to boost the prices by presenting "estimates and wishes", not real facts. Yes, the Russians have been in Bulgaria for a long time, especially in Varna, but like most big investors they will go where the money is. And it is not Bulgaria any longer. And most correctly, the Brits have been buying holiday homes as individual microinvestors , and the speed has definitively slowed down. Last year only 1400 Brits bought properties in Bulgaria, while the authorities presented an estimate of 44 000. A lot of investment projects and business/shopping centra in Bulgaria are no falling apart and declared bankrupt because the agencies and authorities have presented completely insane market estimates.
The same happens in Sunny Beach and Varna- the list of bankrupt hotels for sale is longer than both your arms. The Bulgarian property market is facing a complete collapse and it will be boosted by the international credit crunch. But who can blame the authorities in their efforts to save as much as possible ? But the good days are coming to an end.

BOO, GHOST-FURIAN very scary doomsday is coming!

Furian give me a brake, would you.

Let me put it that way, whatever prices you see now for real estate in Bulgaria will be at least DOUBLE in 10 years. Write it in stone. The emerging markets are just an embryo in this present moment, and the explosive growth has not even begun yet!

BRIC is the future name of the game in the business world and it stands for Brazil, Russia, India and China. There is an immense opportunity for growth in all those countries, which will literary overflow Europe with investments, ESPECIALLY Eastern Europe. Wait and look for all those Chinese and Indian investors, because each and every one of them happens to REALLY like Europe.

George. The term BRIC is already falling into disuse as inappropriate. The real estate market could be DOUBLE in 10 years (although I fail to see why DOUBLE is better than double, I leave that to you) it could also be - not!

BRIC is an old term, and already beginning to fall into disuse. The four sets of economies are very divergent and trying to place them all under one umbrella is not wise. Russia's wealth is built on a single source, and this is never clever for long term growth. Mineral wealth is fine, whilst mineral prices are high. This is not going to go on forever. Brazil is well set, growth has been steady at around 4% this year and it's democratic institutions are largely (with certain distinct problems of its own) supporting the economic structures of the country.

China - I make no comment. It keeps going and going. It is vast and learning and unpredictable.

India - it is not learning. It still can take several days for a lorry to cross an internal border in the country. It has along way to go.

You think they will overflow Europe with investment - why? First they have to have something to invest in - and if all Bulgaria offers is property - then it'll all go splat. Bulgaria could offer more, but it has to work hard, and change it's government structures - then it could do well. Don't bank on the Russian investors bailing out Bulgaria, it may not happen.

It's not that they like Europe. they like making a profit and they will invest where they can make it. There are lots of emerging markets in Europe, Bg is only one of them - and there are lots more all around Asia - and Africa is also rising (albeit sporadically and uncertainly). Complacency George, could be dangerous to the long term economic prospects of the country. Your attitude worries me, it's the old "wait around and it'll happen" thing - and it don't just work like that.