Bulgarian property bubble

There were rumors and speculations regarding the existence of property bubble in Bulgaria since at least 2006, however many interested parties (especially banks) had the interest to discredit such possibility. Most of all, since the property bubble has been the driving force in GDP growth in Bulgaria most players in the market, including government have been satisfied with the situation. Provided that the growth, and the property prices have sustained during the Financial crisis, there was a possibility that the growth of the bubble would return in late 2009, or early 2010. However since October, 2008 there has been sharp drop in real estate market, including but not limited to:

• lower number of property buyers
• considerable drop in property prices
• sharp decrease in property sales
• many real estate companies have closed or temporary suspended operations

Along other reasons the current property bubble burst, there is the factor of increased interest rates and bank requirements to provide mortgage, which were part of the reason why the previous conditions of end 2005 and beginning 2006 have provided for easy access to loan for many Bulgarians. It May Be accurate to say that the beginning of the bubble burst occurred somewhere around July-August 2008, however the visible tipping point is October 2008. Analyzing several different sources, including media, several online portals and property experts, the burst was long experted, and the Global Financial crisis only the catalyst of events, since most financial institutions in Bulgaria are foreign investments.