Growth in Bulgaria and Romania set to outpace the UK

Growth in the economies of Bulgaria and Romania will outpace that of the rest of Europe for at least the next two years as a result of their accession to the EU on the 1st January 2007 according to property investment experts 4:Property.

Structural changes and increased foreign direct investment have already had a huge impact on Bulgaria and Romania offering investors strong investment opportunities. 4:Property anticipates annual economic growth rates of between 4% and 8% for both countries moving forward, compared with a maximum of between 2% and 3% for the UK. Romania’s annual economic growth of 7% for 2006 already makes it one of Europe’s fastest growing economies.

Chris Howard, Managing Director of 4:Property, comments: “The EU has already implemented many improvements and invested money in transport infrastructure and the restructuring and liberalising of the banking systems (both retail and wholesale). These actions have had a profound effect on businesses that are now more open to change and outside influences. Corporations and private investors have made substantial foreign direct investments seeking to take advantage of the low wage economies. In Bulgaria, in 2005, foreign direct investment reached a record high of €2,400 million, corresponding to 11.2% of GDP.”

Foreign investment has also helped to increase local incomes with employment opportunities growing and cities benefiting from inward investment and improved travel. Salaries have risen and as banks liberalise their mortgage offerings the buying power of local residents has grown substantially impacting positively on property prices.
Tourism has also expanded rapidly over the last few years due to increased international media exposure and the growth of cheap airline travel. This tourism boost will positively affect the property market in particular, generating a rental income for second homeowners in a wide range of regions, from ski resort complexes to mountain retreats and beach side villas.

Chris Howard concludes: “As always in property, local market knowledge is power, the investor needs to know the market, which is not easy from a distance. These countries have different legal systems to the UK and this generates many issues in relation to good title, so at the very least, a good local legal representative is vital for anyone looking to profit in these markets. We have seen many investors plunge into property investments with the misconception that property prices always rise. This is clearly not the case. While there are some amazing investment opportunities to be had it is vital to take expert advice along the way. Investment in quality development, for example, can be significantly more profitable than just holding property and hoping for market appreciation.”

For further information visit 4you.uk.com.