Dear Valued Stara Planina Properties Client,
First wishing you a very happy and prosperous New Year 2006.
The Bulgarian real estate market in 2005 remains buoyant but the buyer now has to be more selective in where and what they buy. The number of property transactions completed in 2005 is expected to reach 250,000 which is 28% up on 2004 figures. Of this total it has been estimated that 3% of the deals are completed by foreigners. A large proportion of these foreigners are British along with Irish, German and Scandinavian investors. The interest from Russia has existed for many years and still remains strong.
The interest in Bulgarian real estate amongst the British market really started in 2001 following the broadcast of Channel Four’s A Place in the Sun in which we assisted. Since that date Bulgarian has been featured on ITV’s I Want That House, Real Estate TV’s The Next Big Thing Bulgaria and many other TV show’s and has lined the pages of many national newspapers and specialist magazines. Not all of the reviews have been positive but this can only be expected once the spotlight is fixed firmly upon you.
The initial attraction for buyers has always been the relative low cost of housing and comparative proximity to the UK. Obviously Bulgaria has much more to offer and this is only realized by visitors once in-country. These “pull” factors have been complimented by a number of “push” factors of a UK domestic nature that have driven British buyers to look elsewhere to invest their money. A strong economy and healthy capital growth in UK property prices has meant that people have felt the security to invest their money in foreign lands. For instance in 2002 Brits spent just 2 billion pounds in second homes overseas this figure has now tripled to 6 billion pounds in 2005. Also as we all know the British have an obsession with property and have tended to be the pioneers in terms of exploring new regions to escape to. Sadly to say that one of the most commonly raised (although not sure how much really felt) “push” factors from the UK is a disillusionment that many of our clients have with British society and the so-called rat race.
Bulgaria has been seen as a stable country to invest. All the key economic indictors of inflation, unemployment and interest rates have come down to respectable levels and with their imminent membership to the EU the future looks very positive for Bulgaria. Perhaps the boom years in terms of property price increases of 40% per annum are behind us but still forecasts of 20% per annum for the next five years are healthy figures and are sure to attract further investment given the flatten out of the UK market. One should also bear in mind that these are average figures and there are still higher returns to be had through careful selection of locations and types of properties in to which to invest.
At the start of the boom in 2001 attention was firmly focused in the Black Sea region and in particular around Varna and the Sunny Beach resort in the south. Also inland destinations such as Veliko Turnovo received considerable interest. Now the net is cast much wider with agents opening operations throughout Bulgaria but I think buyers need to do some homework to check carefully where it is that you are being invited to buy since not all regions of Bulgaria are the same. I also strongly believe that it is worth keeping an eye on where the Bulgarians are investing their money and to bear in mind that this represents 97% of the real estate deals in Bulgaria. The tendency in fact is to buy in urban areas where there are plenty of facilities on offer together with better job opportunities and with this comes the higher rental potential of any investment made. Bearing this in mind then Sofia, Varna, Plovdiv and still cities like Veliko Turnovo and Rousse just to the north on the River Danube probably remain sound choices if you are looking to optimize your returns. For those looking to buy a piece of rural tranquility the villages will always remain a good low cost option and offer a slice of life that is not so easy to find in Western Europe as our villages.
Rural properties can be bought for as little as 10,000 pounds but most of our clients end up spending a further 10,000–20,000 pounds doing them up. In the urban areas price vary considerable but for a new or off-plan development expect to pay between 500- 1,000 euro per sq m. This would be for a shell and you should expect to pay somewhere between 200- 300 euro per sq m to have the place fitted out. Obviously there will always be variations around these prices but these prices pretty much represent the middle ground.
Prices for apartments along the Black Sea Coast vary from 800-1,500 euro per sq m but beware there is a lot of poor quality work on offer with little consideration to setting. The best advice I would give is to buy the cheapest property in the best development.
What does the future hold for Bulgaria? Given it’s starting point it has made great progress and this will be reflected in an improving quality of life and opportunities for all. Property prices will continue to increase to reflect the increased domestic spending power but such dramatic prices increases of the last 5 years are perhaps behind us and the market should stabilize around 20% per annum.
25th April 2005 Bulgaria's president Georgi Parvanov, prime minister Simeon Saxe-Coburg and two other Cabinet members signed in Luxembourg the European Union (EU) accession treaty, paving the way for full membership of the country in 2007. Sofia shared the landmark moment with Bucharest - both Balkan neighbours are scheduled to become full members of the Union on January 1, 2007.
14th October 2005 The 30-year-old Bulgarian Veselin Topalov becomes the New World Chess Champion with unsurpassable score of 9.5 points out of 13 games. Topalov's triumph started earlier in the year when he beated legendary Gary Kasparov at the most prestigious chess tournament in Linares, Spain. Topalov was born in the city of Rousse and made his first steps in the chess game when he was eight years old. He grabbed his first world title at the age of 14 at the Junior World Chess Championship. In the year 2004 another Bulgarian, Antoaneta Stephanova became the Woman World Champion.
22nd September 2005 The Hungary’s Wizz Air is the first low-cost airline to start flights to Sofia with rates starting as low as 20 euros. A month later the budget airlines Slovakia’s SkyEurope and Italia’s May Air have declared their intention to start operations in Bulgaria. UK First Choice Airways has expressed interest in servicing the Bristol-Sofia and Glasgow-Sofia destinations. The new destinations will be launched in the next two years following the completion of the new Sofia airport terminals. The low-cost airlines are likely to go for touchdown on the old terminal.
July and August 2005 Bulgaria faced the worst floods for the last 100 years. The devastating floodwaters hit large areas of the country during the summer months taking 5 victims.
Bulgaria's EU-affairs Minister Meglena Kuneva, one of the most successful members of two governments, achieved her goal of Bulgarian signature to the treaty to join the EU in the year 2007.
In March 2005 the Bulgarian clarinet player Ivo Papazov won the annual BBC Radio 3 World Music Audience Award. The Bulgarian virtuoso was nominated to run for the prestigious prize for his latest album Panair ("Fair").