Eastern Europe, once almost a no-go area, is now a must-buy destination for British buyers. Amanda Shiel looks at what’s on the market
Former Communist countries are among the most popular buying zones for UK investors. With low prices and scope for growth, these newly flowering countries, increasingly accepted by the EU, are proving very successful.
Bulgaria
Developers are touting ‘five-star resorts’ all over the world but what really constitutes five star and in whose eyes? Dream Homes WorldWide is confidently promoting Sunset Resort, ten minutes’ from Bourgas International Airport on Bulgaria’s Black Sea Coast, as the only genuine five-star development in the area.
Hotel classification systems only came in after the Second World War triggered by efforts from National Tourist Boards, and it took its time, by 1970 only five European countries had national classification systems, but by 1980 this had increased to 22 European countries and 60 worldwide. Frustratingly for the consumer, hotel grading systems will never be uniform across the board, national expectations are just so different. The Brits demand a cooked breakfast, the French long for a bidet, the Portuguese want a selection of cigars at reception, the Dutch love their towels whilst the Americans are partial to an ice machine. Star ratings can be confusing and misleading to say the least.
Adam Godwin, Marketing Manager of Dream Homes WorldWide comments, “In the overseas property market consumers face the same conundrum. Developers are touting ‘five star resorts’ all over the world but what really constitutes five star and in whose eyes? We are confidently promoting Sunset Resort, ten minutes’ from Bourgas International Airport on Bulgaria’s Black Sea Coast, as the only genuine five star development in the area. Taking into account ‘fixtures’ and ‘feel’, Sunset Resort leaves its competition in the shade, they simply cannot compare on facilities, service, comfort, location and architectural style.”
Sunset Resort is the largest resort on the Black Sea coast with almost 800 units and occupies 400 metres of sandy coastline which, with virtually no currents, has an unblemished reputation for safety. With indoor pools, outdoor pools, lazy pools, waterslides and direct access to nature’s own, the sea, water lovers will be in paradise, whilst on dry land Sunset Resort also boasts restaurants, cafés, bars, a casino, shops, beauty salon, conference facilities, Spa, gymnasium, tennis courts and a kindergarten, to name but a few. Sunset Resort is only 10 minutes drive from Bourgas International Airport and 2km from the centre of Pomorie, a town famous for its mud spas, fruit, vegetables and wineries - all thanks to rich, fertile soil.
Phase two properties at Sunset Resort are all one bedroom apartments which will be fully fitted and furnished and ready for immediate occupation. Boasting spacious private terraces, remote control air conditioning units, custom-built kitchens complete with white goods and large bathrooms, there is a full rental scheme that guarantees a net annual return of 5.5% for three years, all this on prices starting from £75,100.
Payment terms £700 deposit, 40% at contract, 20% on completion of rough construction and 40% on completion estimated for April 2008.
Dream Homes Worldwide can be contacted on UK freephone 08000 193 847 or telephone 00 34 952 908 803 email enquiry@dreamhomesww.com or view www.dreamhomesww.com
Info on the Black Sea Coast
The coastline has 220km of sandy beaches, 10 of which hold the prestigious Blue Flag accolade as well as one Blue Flag rated marina. The climate is temperate and warm between April and October making the area a perennial favourite with Russia’s elite. The Sea is low in salt, has negligible tides or currents and is ideal for safe bathing. New golf courses are being built around established resorts, including those designed by Gary Player and Ian Woosnam, in order to cater to the lucrative golfing market. Carriers including WizzAir (Luton), Excel (Gatwick, Manchester), Thomsonfly (most UK airports) and My Travel (Newcastle, Glasgow, Belfast, Manchester, Bristol, Birmingham, Gatwick) all have direct flights into Bourgas International Airport.
Poland
Warsaw has been one of the world’s premier places to invest for several years now. During 2003, property prices in Poland actually fell, which provided a head start for investors. Poland’s European Union accession in 2004 lead to a large amount of government funding, a booming economy and an increase of industry to Warsaw, the country’s business and political hub, generating a large number of new jobs. More and more people migrated to Warsaw in search of these jobs, increasing population levels, reducing unemployment and creating an excess of disposable income.
The recent introduction of mortgages in Poland meant that locals could obtain 100% loan to value finance. This availability of cheap credit, combined with low property prices and an excess of disposable income, drove demand for property up in Poland and Warsaw in particular. The country was experiencing relatively slow supply due to an archaic planning system and the combination of this high demand and restricted supply, resulted in the perfect conditions for large and sustained increases in property prices. Today, prices have more than doubled in Warsaw since EU accession and growth has returned to normal levels, which leaves us wondering if the market has room to continue growing and whether it will remain one of the premier places to invest going forward.
Simon Tweddle, Chief Analyst at Property Secrets comments;
“Although property in Warsaw is less affordable today than it was a year ago, I believe the fundamentals of the market are still strong and we will see long term sustained growth of 10-20% per annum over the next five to ten years.”
“The economy is still performing well and unemployment is falling. Mortgages have become slightly more expensive recently, but rates are still low and not high enough to put any serious brakes on the housing boom.”
Simon adds; “The 19 billion euros the government plans to spend, as a result of hosting the Euro 2012 football championships, will not only improve the country’s economic infrastructure and regenerate its cities, but will also put further strains on the cost of building materials and labour – again putting upward pressure on property prices.”
“The supply and demand dynamics of the market are out of balance (in our favour) and I believe we will continue to see good (approx 15% per annum on average), long term growth in the maturing Warsaw property market for very low risk.”
Some of the less popular areas of Warsaw are undergoing significant regeneration which is where the most capital growth is anticipated over the next few years. Wola, is not a particularly attractive area of Warsaw but low prices, massive infrastructure improvements and its proximity to the centre make it a great long term investment location. This can also be said of Praga on the other side of the river. Praga North is attracting lots of artists and is expected to be a very trendy place to live in the near future. In the short to medium term, the areas around the planned new metro line are where good growth levels are expected, such as Bemowo and Bielany, which are already showing very positive signs.
In conclusion, Simon adds; “Warsaw is a great long-term, low-risk bet. The fundamentals are still strong and the market is not likely to go away any time soon. The city centre is very expensive and growth is likely to be low relative to the rest of the city, although it would provide a good, low-risk, steady, long-term growth investment area. Some of the more outlying districts, which will benefit from new metro lines and roads, are likely to provide the highest growth rates medium to long term.”
“Warsaw still provides the property investor with a great mix of relative risk and relative reward. An investment in Warsaw, I believe, should be part of any serious Central and Eastern European property investor’s portfolio and is a buy now opportunity – before prices rise still further.”
Romania
Romania is a fast growing country which is attracting interest from UK investors keen to be on the first rung in a country with enormous capital growth potential.
“Britons are discovering that Europe’s Eastern frontier has much to offer”, says Anda Giorgio of Romanian Property Connections Ltd, specialist in Romania and members of FOPDAC (Federation of Overseas Property Developers, Agents and Consultants).
What is also attracting investors is The Marisia EcoSpa Resort which is being built to British standards right down to three pin plug sockets! The resort is being constructed to be as ecologically sensitive and sustainable as possible. The whole resort will provide log cabins from sustainable forestry with underfloor heating from woodchip fired boilers. Using a variety of energy solutions the resort will offer solar and wind power to rainwater entrapment and grey water recycling.
Marisia EcoSpa hopes to be an important example of a sustainable business model in this fast developing new EU member state. The resort is located in the Mures River Valley area of Ideciu de Jos chosen because of its unique magnesic muds and chlorosodic mineral waters.
“The Marisia Eco-Spa Resort represents a marvellous opportunity for Britons looking for a sound investment in holiday property abroad”, continues Anda “It is perfect as an investment in the booming Romanian market for domestic tourism and Transylvania’s emergence as an international holiday destination and property investment hotspot”.
Steve Emmett, Chairman of FOPDAC says,” As with all emerging countries there is an element of speculation. Unlike more traditional investment countries such as Spain and Portugal there is no record of capital growth or rental returns but nevertheless as Europe opens up, there are opportunities for speculative investment which could prove dramatically beneficial.
FOPDAC has been operating over 30 years and all our members are carefully vetted so that a buyer committing their finances know that the company with whom they are dealing has passed our stringent criteria. The Federation was formed to protect purchasers from unscrupulous agents and developers and its importance within the industry has never been so great.
We ensure that members satisfy the committee as to their suitability and thereby ensure that purchasers are protected”.
FOPDAC
www.fopdac.com
0208 941 5588
Romanian Property Connections Ltd
0208 748 5868
www.romanianhomes.com
Hungary
Central Passage is a prestige development in the heart of downtown Budapatest.
This development consists of 270 units and was released to the market in 2005.
Last month all 270 units had been reserved but 16 units are back on the market as a result of a cancellation.
The area around this part of Kiraly Street is going to become the hop part of town as a result of a number (All sold) of flagship developments. When all these units are completed, and the luxury ground floor shops and restaurants start to make their mark, we think there will be dramatic price increases in this small chic area.
This is an opportunity to find an apartment or studio in the bustling, cultured, city of Budapest, home to warm thermal baths, busy markets and stunning architecture.
A 10% deposit will secure these apartments.
Available individually or as a bulk purchase.
The Central Passage Budapest building is 7 storeys tall; highly individual in architectural style and situated at the very centre of the city (at number 8, Király Street - located in the privileged zone of Pest) it will be a welcome addition to the skyline.
Once completed, it will cover a total of 16.103 square metres, with 271 top quality homes. Central Passage Budapest offers a range of flats and apartments (1, 2, and 3 bedrooms) ranging from 34 to 112 square metres, all with garage parking. The building will also include a shopping mall and offices on the ground and mezzanine floors.
The range of options makes it possible for buyers to choose the home that best suits their needs: studio flats with different sized balconies, 1 and 2-bedroom apartments, also to be built with balconies, and 3-bedroom flats for families or those who love large spaces.
Buyers may purchase garage parking spaces for each flat if they wish. For more information call
01787 269 137
hungarian-investments.com.