The Bulgarian property market - the rising price of property for sale in Bulgaria
Property in Bulgaria is among the cheapest in Europe. This is one of the main reasons the Bulgarian property market has attracted so much attention in the last few years. But although nearly a quarter of all property for sale in Bulgaria was sold to foreigners last year, the Bulgarian property market remains relatively unexplored and undeveloped.
While the price of property for sale in Bulgaria is estimated to be rising at a respectable 10-15%, growth has slowed. This is hardly surprising. It was never likely that the Bulgarian property market could continue to rise at 40% as it did between 2003 and 2004.
Why are people buying property in Bulgaria?
The majority of purchases by foreigners of property for sale in Bulgaria have been for holiday homes, often with a view to retirement later. But more and more buyers are looking to make a substantial capital gain from their Bulgarian property investment, either in the short, medium or long-term.
As a general rule, property for sale in Bulgaria´s inland areas are far cheaper than in the tourist destinations. However, most people buying Bulgarian property for investment and rental income choose to buy in the resorts.
What and where is the most popular type of property in Bulgaria?
Currently, the most popular property in Bulgaria is the off-plan apartment, usually with one or two bedrooms, located in strategic coastal or mountain resorts. Similar property for sale in Bulgaria´s new golfing centres is also creating a stir.
In terms of Bulgarian property market hotspots, there was a slight shift during 2006 with greater interest in top-quality apartment property in Bulgaria´s capital, Sofia. Prices of property for sale in Bulgaria´s Black Sea resorts have grown but the rate has faltered a little in some of the most developed.
What next for the Bulgarian property market?
Two factors suggest property in Bulgaria will continue to perform well: the country´s economy and its tourist appeal.
As one of the newest members of the EU, the country is enjoying a great deal of foreign investment and infrastructure improvement. As in any country, the price of property in Bulgaria is linked to the nation´s economic success and Bulgaria´s economy has never looked stronger. GDP in Bulgaria was running at 5.6% in the first half of 2006.
Tourism also has a huge impact on the Bulgarian property market. While the coastal and mountain regions have well-known holiday spots, much of the country remains off the tourist map and this has suppressed prices of property for sale in Bulgaria´s interior. Some spa towns with Roman attractions have yet to be fully discovered and there are large unexplored regions of great natural beauty that would appeal to tourists wanting more than sun, sand and snow. As awareness grows, the price of property in Bulgaria´s inland areas is forecast to rise.
Is it all Hype
EU accession is expected to bolster the Bulgarian property market dramatically. It will mean that the low-budget airlines will be able to take off for Sofia and, possibly, for the regional airports. This will enhance the appeal for people looking for property in Bulgaria.
Based on the experience of Ireland and Hungary after they joined the EU club, prices of property for sale in Bulgaria should rise with EU accession. Buying property in Bulgaria before EU membership could, therefore, mean fairly instant capital returns. In addition, the current restriction on foreigners buying land with property in Bulgaria will be lifted on accession and this will further boost interest from investors.
