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Bulgaria Property and Financial

According to Address real estate agency, studios and small apartments are increasingly popular, accounting for some 34% of sales. With limited supply and high demand, newly built small flats at low prices are showing strong sales.

Kaloyan Bogdanov, Marketing Manager, said that the supply of these types of properties is decreasing and new construction is on hold, adding 'this will likely create a tendency whereby in the next few months, the demand is likely to surpass initial forecasts'. 

Address also highlights the negotiating power of buyers, saying that in 87% of transactions, the buyer sought to reduce the sale price. Average discounts worked at around 3,000 euros or 5% of the property price. The agency believes that a rise in real estate values is unlikely until the third or fourth quarter this year, due to the global economic situation.

On the economy a press release issued by notes that Bulgaria is 'now well into a recession', and predicts economic growth of only 0.4% during this year. The report goes on to add that the world financial crisis has led to demand for residential property to dry up.

There has been much focus this week on a likely rise in VAT. We'll know whether this will happen and by how much next week. Experts consider that the VAT rate could rise from its current 20% up to as much as 25%. The Prime Minister said that any rise now was an emergency measure and that after other anti-crisis measures provide expected results, then the VAT rate would be lowered again. The decision will be made on 5 May, with likely introduction on 1 June.

In another parliamentary vote this week, the government against a total ban on smoking in cafes, restaurants and bars. The ban, which is already in place in all government buildings, was due to be introduced on 1 June. With the amendments, those establishments of less than 100 sq.m. will be allowed to choose whether they want to be a smoking or non-smoking zone. Those restaurants, cafes and bars larger than that size are required to have separate (isolated) smoking and non-smoking areas, with the proviso that the non-smoking section is the larger.

Reuters also released a short report on the most popular spa resorts. It cited Bulgaria as 'boasting hundreds of mineral springs and dozens of spa resorts, some of which were founded by the Romans.' Bulgaria is endeavouring to revive its spa resorts and balneotherapy, hoping to attract more visitors from all over the world. The list of most  popular spa resorts cited.