Bulgaria sees 2007 property price inflation at 50%

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by Gill Montia

The latest Knight Frank Global House Price Index shows that Bulgaria has once again recorded strong growth.

In the final quarter of 2007, property prices in the country rose by 8%, while over the entire year prices for flats increased by nearly 34%.

Last year, prices rose by over 50% in Vidin in the North West, Ruse in the North East, and Sofia, the country’s capital.

However, the cost of a property still remains relatively low when compared with much of Central and Eastern Europe.

The boom in Bulgaria contrasts sharply with growth in the Baltic states. In 2007, Latvia and Estonia recorded negative growth (-7.1% and -14.5% respectively), while in Lithuania prices rose by just under 1%.

The figures compare with 66.6%, 23.8% and 23% annualised growth rates respectively for 2006.

All three countries experienced changes in employment conditions, higher interest rates and a rise in household indebtedness.

Liam Bailey, head of residential research at Knight Frank, comments: “The most outstanding feature in this index in Europe is Bulgaria’s continued strong showing against the astonishing reversal of fortune witnessed in the three Baltic countries.”