Romanian property market matures - profitability drops to 6%

Hotels on Black Sea coast could face bankruptcy next year

Bulgarian population to fall by 30% by 2050

Number of flights from UK to Budapest increasing

2,000 new homes built for ex-pats in Doha

Healthy auction sales return to Sydney

Prices still rising in major Chinese cities

Investment starts for host of 2014 Asian Games

Bulgarian population to fall by 30% by 2050

Bulgaria’s population figures will decrease by 30% by 2050, a report by investment fund Allianz Global Investors said. The rapidly declining population, which is falling by around 0.5% a year, could result in a mass oversupply of property and stagnant property prices, as witnessed in many parts of East Germany over the past 20 years.

The countries of Central and Eastern Europe (CEE) were all facing serious demographic problems, but Bulgaria’s situation was the worst according to the report. Romania, which was second worse, will lose 20% of its population by 2050, while Poland will drop by 10%.

The birth rate in Bulgaria increased in 2006, but the country’s population still decreased by 39,500, according to the National Statistical Institute.

The population of Bulgaria was 7.68m people at the end of 2006. The current ratio between pensioners and workers is 20:100. In 2035, the ratio will be 33:100 and this will grow to 50:100 in 2050 (one in three people).

Number of flights from UK to Budapest increasing

Ryanair is launching new flights to Budapest from Glasgow Prestwick and Liverpool airports this winter. The no-frills giant will operate three flights a week from Glasgow to Budapest, starting on 1 November. The Liverpool to Budapest flights take-off on 31 October and will run four days a week. Ryanair already offers flights to the Hungarian capital from Bristol and the East Midlands.

Romanian property market matures - profitability drops to 6%

Jones Lang LaSalle (JLL) has reported that the Romanian property market is no longer considered cheap comparison to Central Europe.

Property investors in Romania can expect profits similar to those in more mature markets such as Poland and the Czech Republic, according to JLL. In the near future, investors can expect profitability of around 6% on real estate transactions in Romania, the company reportedly said, compared to 9% and up in 2006.

Hotels on Black Sea coast could face bankruptcy next year

Owners of hotels on Bulgaria’s Black Sea coast could face bankruptcy next year, the head of Bulgaria’s tourist agency has warned. A construction spree along Bulgaria’s Black Sea coast in recent years has resulted in supply far outweighing demand, with many hotel beds now empty in the peak of the season. This is only one of the problems facing the country’s tourist industry, said the report.

Millions of euros have been invested in the construction of hotels, bars and other tourism facilities, but the needed infrastructure is missing, Marin Neshkov, a Bulgarian tourism expert in the northern Black Sea city of Varna, reportedly said.

For example, Sunny Beach is now home to more than 200 hotels, including several luxury ones. But the corresponding transportation and communication networks are lacking. There’s also insufficient water supply and sewage treatment.

Tourism provides €2bn annually, approximately half of Bulgaria’s trade deficit, but, according to the chairman of Bulgaria’s tourism agency, the country is now seeing a decline in foreign tourists.

In the first five months of this year the actual number of tourists decreased compared to 2006, however, revenue from international tourism increased by 16% to €532m, according to the State Agency of Tourism (SAT).

Given the fewer number of foreign visitors, many owners have been forced to slash room rates this summer. Despite this, many rooms, especially in hotels without an ocean view, remain empty.

The shortage of holidaymakers could result in many hotel owners going bankrupt next year due to the inability to pay off large debts, a spokesperson for SAT said.

Another problem has been a lack of students willing to work during the summer months, many of whom now go abroad to work for the summer because tourism pays the lowest average wage from all the work sectors in Bulgaria, despite contributing 14% to GDP.

Prices still rising in major Chinese cities

Property prices in 70 major Chinese cities increased by 7.5% in July compared to the previous year, up from 7.1% annual growth in June, the National Development and Reform Commission (NDRC) said.

Prices of new residential properties rose 8.1% year-on-year in July, with the growth rate up 0.7% from a month earlier.

Shenzhen and Beijing were among the top five cities that all recorded property price growth exceeding 10%, at 16.1% and 11.6% respectively, the NDRC said.

Prices of existing homes rose 7.3% year-on-year, a decrease of 0.5% on the June level, the NDRC said.

Investment starts for host of 2014 Asian Games

Singapore-based City Developments has announced that it plans to invest $150-300m in a large-scale commercial, hotel and residential property project it is jointly developing in Incheon, South Korea, with DC Chemical Co Ltd. The project is expected to transform Incheon, where the 2014 Asian Games will be held, into a major global metropolis, it said.

The 1.55m sqm site is primarily owned by DC Chemical and will comprise of a five-star hotel, a grade-A office tower, serviced residences and a shopping mall. The project will also have some 380,000sqm of residential development and 281,850 square meters of mixed-used amenities.

Construction works will start in 2009 and are expected to be completed by 2012.

2,000 new homes built for ex-pats in Doha

Barwa Real Estate Company is constructing 2,000 low-rent houses on the outskirts of Doha, the capital of Qatar. The suburban housing will reportedly be available exclusively to expatriates.

These houses are not intended for Qatari nationals but for low and middle-income expatriate families and will be available by March 2008, commented Ali Mohammed Al Obaidly, board member and senior advisor to the company. It is hoped the new homes will help ease the housing shortage in the capital.

Healthy auction sales return to Sydney

Sydney’s property market has strengthened over the past three months with clearance rates for auction sales hitting 72%, despite auction volumes being up by 20% on this time last year. The clearance rates are the strongest since the last property boom in 2003.

However, local estate agents are worried that the usual influx of ‘spring’ stock for upcoming auctions is nowhere near the levels they were hoping for, said Michael McNamara research analyst for Australia Property Monitors.

He reportedly said: “Expect a stronger spring selling season this year but in prices not volumes. Given that there are more investors wishing to increase their exposure to the real estate market, we are seeing tight stock levels.”

Over the past few months, Sydney’s best-performing district has been the ‘inner west’ area, where agents have had a 76% clearance rate, up from 61% last year. The median house price in the area was $765,000, (£310,000) an increase of 11% over the year.

The lower North Shore and eastern suburbs were next best, with a 75% clearance rate, up from about 59% last winter. Median house prices have jumped by 10% or more on both sides of the harbour to $1.2m (£486,000) on the lower North Shore and $1.1m (£445,000) in the east.