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January 2007, 19/01/2007

Dear Valued Stara Planina Properties Client,

Firstly we wish you a very happy and prosperous New Year 2007!

2006 Bulgarian Property Market Review

For most people trying to get a clear picture as to how the market has developed over 2006 must be quite difficult. It seems that there is a mixed message coming from the printed media and experts in the area. Some people have spoken of price decreases in certain areas, others - of increases in the same areas. We will try to present to you our perspective on the changes.
The number of property transactions completed in 2006 is expected to reach 280,000 which is an increase of 12% (compared to 250,000 deals in 2005). In December 2006 there was a marked increase in sales (3 times higher than the previous years December). This was obviously in anticipation of EU membership but also because some changes in the law has increased some costs associated with the real estate sector i.e. the costs for building permission and changes to tax evaluation of properties (i.e. ratable values).

Overall it has been observed that prices in Bulgaria have risen by between 15-20% however there is much variation within this. Along the coast there are examples of prices going down but within 5 minutes drive examples of price increases. It seems that certain villages have that "wow" factor over others. It perhaps demonstrates that time taken to look around is time well spent. The only locations where prices seem to be uniformly increasing are the urban areas such as Sofia.

What the future brings is difficult to say. In fact after the buoyancy in December 2006 it seems that activity has quietened. Indeed there was the same effect when Poland and the other Eastern European countries joined the EU in May 2004. People waited to see what would happen with the prices. In these countries prices started to take off only after 6 months of joining.

Please Note!
Contrary to what many people might think currently you still need to register a company to own land in Bulgaria. According to the legislation this will not change until 2014 however there is a motion before parliament to change this earlier – whether or not this happens we will keep you informed.

The Best and the Worst for Bulgaria in 2006

The best of the 2006

Confirmation of the EU membership

After many controversial comments in October the European Commission confirmed that Bulgaria and Romania would join the EU on 1st January 2007. For most Bulgarians who have always considered themselves Europeans this was a perfectly natural progression. Unlike the people of many other countries in Central and Eastern Europe the majority of Bulgarians expect with optimism the changes which will follow after the accession. Whether they are right in their hopes – only the time will show.

Signing of Memorandum for supply of natural gas until 2030

In December 2006 the Bulgarian Government signed memorandum with Gazprom, the biggest supplier of natural gas in Europe. The memorandum agreed the conditions for the supply of natural gas to Bulgaria until 2030 and thus lessened the fears of instability on the Bulgarian energy market. At the same time a contract was signed for the construction of the second nuclear power station which should improve the position of Bulgaria after the shutting down of two reactors of the first Bulgarian nuclear power station in Kozlodui on 31st December 2006.

The year of treasures and music

Nine gold and silver Thracian treasures found in Bulgaria were exhibited together for the first time ever. The dazzling artifacts were displayed at Varna archaeological museum for the whole summer. At the same time Kavarna has been proclaimed the 'rock capital' of Bulgaria by the thousands of fans attending the concerts of the legendary rock bands Apocalyptica, Whitesnake, Twisted Sister, Helloween, Testament. Depeche Mode, Sting, Seal and pop icons performed in Sofia and the coastal town of Nessebar.

The worst of the 2006

The Libyan Court confirmed the death sentences of five Bulgarian nurses

December 2006

Five Bulgarian nurses and a Palestinian doctor were sentenced to death for intentionally infecting with HIV 400 children in a Libyan hospital in Bengasi. The nurses have been in jail for more than 8 years. Several internationally acclaimed HIV researchers have proved scientifically that the reason for the infection is intra-hospital infection which had started at least one year before the nurses were employed in Libya. Many Bulgarian and international organisations endeavor to secure a fair trial for the Bulgarians and Palestinian but their efforts remain in vain.

People of the Year

Bulgarian ice dancers Albena Denkova and Maxim Staviski who won the World Champion Title in Calgary, Canada in March 2006. The pair earned world popularity and the admiration of the fans with innovation and technical difficulty of their dances and the artistic appearance.

Bulgaria's president Georgi Parvanov who was electet for a second time in October 2006. Thus he became the first Bulgarian president after the political changes in 1989 who kept his post for a second mandate.

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