CONSTRUCTION SECTOR TO GROW BY 10-12% A YEAR
The construction sector will be growing by 10 to 12% on average a year by 2010, Deputy Minister of Regional Development and Public Works Dimcho Mihaylovski predicted at the opening of the Estates Expo exhibition. In 2005, the sector remained among the most dynamic and fast-developing ones in Bulgaria. The tendency has been gaining strength in the past three years and is based mainly on the entrance of lots of foreign investments in the branch. As a result, both supply and demand are increasing, while quality is becoming an ever more decisive factor when a home, office or commercial area is to be chosen.
Processes in Bulgaria are not isolated, they are similar to those in Central and Eastern Europe. According to information from the regional department, investments in real estates in the region amounted to EUR5BN - EUR5.5BN in 2005. In Bulgaria, nearly 1,900 new buildings were constructed last year, compared to 1,500 in 2004. Thirty-seven per cent of them have been bought by foreigners. This figure refers to the more luxurious and expensive sites, the Bulgarian Investment Agency reveals. Buildings in winter resorts and villages are most demanded, followed by trade centres and industrial zones as well as by estates in closed home districts.
Experts comment that the number of foreign-capital constructing companies will grow on the Bulgarian market by the end of 2006 and in 2007. They say that German, Italian and Greek firms are already making plans to settle in Bulgaria either through buying working Bulgarian enterprises or by registering their own ones. This will increase the price of building activities, since the new players are expected to offer quality and hence more expensive products. Domestic construction firms which are about 20,000 according to unofficial data are mainly small and mid-sized ones and will have problems surviving next year. Joining forces in larger structures may be the only chance for them to compete with the European rivals. If they fail to do so, market shares in the branch will be distributed among the big international companies and just a few Bulgarian ones which have potential to participate in tenders.