CONTRADICTORY statements on the present and future of Bulgaria’s real estate market marked the month of November.

While many Bulgarian experts have predicted that the growth in the sector is slowing down due to decreasing return on investment, there is a more positive sentiment abroad towards Bulgaria’s opportunities.

The most recent confirmation came on November 24, when the UK real estate portal news.assetz.co.uk, backed by a group of realtors from the UK, France, Spain, Dubai, Bulgaria, Cyprus and other countries, wrote that this country was “one of the principal growth property markets in Europe”.

In an article, entitled “Bulgaria Breaks Property Records with Bumper Year,” the portal says that Bulgaria’s growing property market has experienced yet another record-breaking year of investment, with about 250 000 homes expected to be sold and finalised by the end of this year.

“At a time when most countries are seeing the growth of the past few years ebbing away, Bulgaria expects this year to bring a 28 per cent increase on the number of homes sold last year - which had also been a bumper year with 196 000 properties sold,” news.assetz.co.uk said.

Bulgaria was also singled out by leaders in the real estate market at a major international forum in Vienna. Although investors are set to see prices slightly down this year, properties are still set to rise 15 per cent more year-on-year, making it one of Europe’s highest growth markets.

Investors are now being encouraged to take advantage of property opportunities while supply is still strong. After an all-time low of property purchases in 1998 when the number of deals was only 65 179, the market is soaring, thanks to foreign investment and the return of the Bulgarian diaspora, who went abroad to seek work during more difficult times.

“Bulgaria, together with Romania, holds significant potential in the commercial and holiday real estate sectors, where it is joined by Croatia. These will be the most promising sectors for the next three years,” Deyan Kavrakov, head of Bulgaria’s leading full-service real estate company ADIS, was quoted as saying at the Vienna forum.

Analysts forecast that price growth in the residential sector will slow down to about 15 per cent next year.

The Real Estate and Investment Forum (RINFOR), held in Sofia in early November, found that investment in real estate transactions and property development in Bulgaria was expected to reach a billion euro by the end of 2005.

More than 500 recognised international and local real estate developers, investment fund managers, insurers, construction companies, banks, property consultants, hotel owners, tour operators, government and municipal authorities took part in the forum.

Valeri Leviev, managing director of Elta Consult, an associate member of CB Richard Ellis, the world’s largest real estate services company, told the forum that foreign direct investment (FDI) in the real estate sector would be about 25 per cent of all FDI expected to flow into the country by the end of 2005.

The volume of investments in real estate projects, including land purchases, construction works and transactions, totalled about 900 million euro for the first nine months of 2005.

Of course, there are some pessimistic appraisals of the situation in Bulgaria’s real estate sector. Mainly due to the dropping return on investment level, which may drive away some of the potential large investors, they are also a result of the excessive construction some of Bulgaria’s holiday resorts have seen in the past two years.

The past summer season was proof of how excessive construction, accompanied by noise and dirt, can force some more pretentious holiday makers to change the destination for their vacation. German tourists, a traditional portion of foreign visitors to Bulgaria, were seen switching to other countries.

Another sign of crisis is the fact that the market has been recently flooded by offers for sales of hotels and other holiday properties, but has seen no significant number of deals being signed. The local media has shown this in a series of media reports, where leading realtors like Address, Yavlena, Foros and others have been quoted.

The supply is several times higher than the demand and the situation has worsened after the end of the summer season when newly built hotels appeared on the market. The realtors assign the lack of deals to the enormously high prices and the constantly increasing number of offers.

Most of the properties on the market are small and medium hotels in the Black Sea resorts and the lower-altitude mountain resorts. Most of the reasons the owners want to get out of their properties have to do with miscalculated investment, poor infrastructure and bad design.

According to the imot.bg real estate portal, more than 600 hotels across the country are seeking new owners. However, some of the properties are listed with more than one broker, which distorts the overall picture.