Large developers in Bulgarian resorts like Bansko and Sunny Beach will start buying up smaller hotels and knock them down in a bid to inject some luxury into the property market, said banker Stoyan Alexandrov.
He said there is also a lot of concern about the commercial property market too. He called for urgent state legislation to ban companies from using flats in communal blocks as offices, which he believes his harming both property sectors.
Alexandrov, who was the Socialist candidate for mayor of Sofia in 2003, finance minister in the early 1990s, chief executive of the Central Cooperative Bank and Tokuda Bank, and now chairs the supervisory council of D Commerce Bank, wants to see change.
He believes that property prices in Bulgaria are speculatively high, pumped up by some buyers out of snobbism. 'There are people who want to have a piece of land or a flat at specific locations and, therefore, are willing to pay any price. It is a kind of madness,' he said.
He gave the example of Bankya, once a famous spa near Sofia, where prices have rocketed despite poor infrastructure just because there is a kind of chic associated with owning property there.
'The trouble is that because some people obviously have found an easy way to make money, now they are looking for an easy way to spend it,' he added.
He predicts that the popular resorts will see huge changes and that to survive they need to look upmarket. This will mean smaller hotels being bought by bigger rivals and knocked down either to make way for more green spaces or replaced with smaller, luxury buildings.
He also claims that the country is still suffering from corruption. 'Construction without proper planning became possible because developers hand out bribes and there is no adequate state control,' he said.