Bulgarian property market and rental sector slowing down

Demand for property in Bulgaria is slowing according to industry experts who believe the global credit crunch is at last reaching East Europe.

Lachezar Iskrov, Chairman of Bulgaria's National Real Estate Association, said instead of rising during the summer, interest is actually decreasing.

'As far as the mortgage crisis in the US is concerned there is clearly an influence in all countries, leading to a slow down in real estate sales, especially in the coming months,' he said.

'The reduction of activity in the real estate market could be a sign that those prices have reached their highest segment level and the growth rates from 2007 and the first months of 2008 may not be matched again,' he added.

At present property demand remains the highest in Sofia and Varna, which can be easily explained by the fact that Varna is Bulgaria's biggest summer attraction while Sofia is still experiencing high demand for residential facilities.

It comes at a time when visitor numbers are declining as well. The industry is bracing itself for a flat tourist season after half a decade of double-digit growth.

While some resorts such as Sunny Beach and Elenite have strong bookings those on the northern side of the Black Sea are finding it tougher.

According to the tourist office some resorts are struggling to fill the sizeable gap left this year by the pullback on the UK and Scandinavian markets. In 2007, British tour operators TUI and First Choice struck Varna from their holiday catalogues. Thomas Cook may follow suit next season. There has been a 30 to 50% slump in Scandinavian bookings compared to summer 2007.

Although Germans and Russians are showing more interest in Bulgaria, fewer Bulgarians are expected to take their holidays by the sea this year. A national survey found 64% would not visit Black Sea resorts.