Sofia is Where the Smart Property Investment Money Is

Bulgaria was the brash newcomer of the world’s property market a few short years ago. Now, after experiencing the highs of a booming market followed by the lows of a price correction in some parts of the country the situation is more complicated.

If you do your research on the Bulgarian property market it is possible to find very contradictory information on the health of the market. One the one hand, newspaper reports about unscrupulous developers and agents, and stories about people unable to sell their unremarkable new-build flats in Black Sea coastal resorts make for sober reading. Meanwhile, international sales agency Knight Frank recently published a report looking at house price growth across the globe, calculating that Bulgaria has experienced the biggest capital growth of anywhere in its report. The report stated: “While the rate of growth in the price of flats was lower than in previous quarters, it was nonetheless maintained at over 30 per cent, again being driven by the performance of areas bordering Romania such as Ruse and Vidin, as well as the capital Sofia, where year-on-year price inflation exceeded 60 per cent.”

Assetz, the property investment and sales agency, is also enthusiastic about the market, but not wholly so. “Those purchasing homes overseas in the last five years will have found few destinations to rival Bulgaria for strong capital gains,” adds its managing director Stuart Law. “However, major oversupply in the country’s most popular tourist areas means that this is set to lower significantly in the near future. Assetz has always advised caution to property investors in these areas, and rental returns have now started to fall into the negative. It is very likely that average property price growth statistics have been misleading, with rural property price growth masking poor performance in the tourist hotspots for at least the last 12 months.”

Traditionally, Brits have mainly bought in the coastal areas in the east of the country – Sunny Beach, Bourgas and Golden Sands, for example, where the tourists are predominantly British and Germans on package holidays and you can still pick up a flat for £40,000 – and the ski areas, such as Bansko and Pamporovo. It is resorts such as Sunny Beach and Golden Sands where concerns about oversupply are most valid, easily confirmed by the rows of uniform new-build apartments on display when you visit.

If you’re thinking strictly property investment, then Sofia, the capital of Bulgaria, is – according to most property experts – where the smart money is. With an influx of international companies setting up offices here, an expanding middle class, and relatively recent access to mortgages, Bulgaria’s capital city is showing the best price growth in the former Soviet Bloc country.

“While many property investors have focused on the tourist areas such as Bansko, Golden Sands and Sunny Beach, the astute property investor has looked towards Sofia, which is benefitting from plenty of property investment and a year-round rental market,” says Kirsty Barry of Select Property, an agency selling in the area. “Sofia has seen a significant influx of multinational companies including Hewlett Packard, Sony and Cisco Systems. This has created jobs and therefore increased demand for a strong professional rental market, requiring new-build and commuter belt properties that are close to areas of work. While Sofia’s property prices have risen – they rose 25 per cent in 2007 – it still remains the second cheapest capital city to buy residential price in Europe.”

South Sofia commands the highest rent and is considered more desirable then north – and, according to developer Aston Lloyd, rents in south Sofia went up by 20 per cent in the last year, which is an enormous jump. “Rents rising 20 to 30 per cent in 12 months, along with good capital growth – 20 to 25 per cent per year – are unusual for any property investment market,” says Joe Upchurch, director at Aston Lloyd. “This sets Sofia apart from many emerging markets. This is a result, mainly, of local affordability. Incomes are still not high enough for many Bulgarians to get a mortgage – deposits of 20 per cent are required and interest rates are high, at seven per cent. All this means there are a large number of Bulgarians who can’t afford to buy and are forced to rent.”

For anyone interested in buying, loans of up to 70 per cent of the property’s value are available and solicitor’s fees are normally between £300 and £800. Property taxes are between four and five per cent, though this is different in the various regions. Estate agents fees are three per cent of the agent’s fees – both buyers and sellers pay estate agents three per cent.

While you need to be wary about the reputation of developers anywhere you buy in the world, you need to be particularly wary in Bulgaria. There are many Black Sea coast developments that are not achieving anywhere near the rental yields promised, and others have never been built. “Buyers are advised to check the credentials of any developer carefully and ensure that they have the capital to fund the entire development, and are not entirely reliant upon sales to finance the build,” says James Hickman of Caxton FX.

“Regular tales surface about dodgy agents in Bulgaria and unscrupulous practices,” adds James Barnes, managing director at Robson Barnes. “Examples include surveys still not being commonplace, agents charging overseas buyers more than the listed price and developers changing plans for new-builds without informing those who have already purchased. It is important to ensure that the infrastructure promised by agents and developers – such as new roads, golf courses and ski lifts – are actually planned and funded, and not just part of the sales pitch. While bargains can be had, buyers do need to have their wits about them when considering Bulgaria.”

Pomorie – A Town With A 100 – Year History – Becomes A Hot Spot With Bulgaria Property Buyers

Pomorie, a town with a 100 -year history, comprises of two parts. The old one is located on a peninsula, to which only one narrow road is leading. As it becomes for a reputable town with rich history, it is densely built, with narrow curvet streets, expressive and even electrical (usually the local guides proudly tell about few buildings designed in “Modern ” style).The new town is located on the continental part and according to tourist guides it does not step back to the old town with its places of sightseeing -its quarters are rectangular, filled with numerous small hotels offering luxurious rooms and the new developments fascinate with individuality of the projects.

Pomorie is a balanced and calm resort. It does not press its guests with the places of historic interest though one can find here some quite interesting architectural monuments.
All these facts can explain why during last years the population in Pomorie, recently counting 14 000 people, is increasing fast. The place is attractive also for foreigners buying their second home in Bulgaria.
The Irish become pioneers in Pomorie real estate market – enterprising and with eyes towards the future. Their presence has been so massive that locals call the first resort complex in Pomorie “Irish village”.

On the property market in Russia one can find also Pomorie estates such as vast apartments (for example 5 bedroom apartment with total area of 240 sq .m. offered at the price of 270 000 EUR), mini-hotel (comprising 14 rooms, three star category, situated in the old part of the town, 300 m. from the sand beaches offered at the price of 450 000 EUR) However most preferred are residences in the newly developed complexes and apartment houses. This has of course its logic explanation; such an estate in resort is not difficult to be rented. Despite this, prices rise with quick rates, so once investing you can expect very good profit.

On all aspects of investing in Bulgarian properties visit our website for a huge resource of articles and the largest and most diverse selection of quality Bulgarian properties at

Bulgaria Property Best For Young Buyers

Nearly one in four are now priced out of the UK property market altogether, so it’s no surprise that they are now considering alternatives that will give them that all-important first step without succumbing to the UK’s sky- high property prices. With talk of 100 percent mortgages, shared ownership schemes and 75-year loan terms, UK home buyers are looking to the Bulgarian property market to make their first home purchase. Just a quick flick through Quest Bulgaria magazine or a search on the internet can reveal many Bulgarian properties that offer three or even four times the space of an equivalent UK house for fraction of the cost.

The average UK house price is now in excess of £200,000 as quoted by the BBC and recent interest rate rises coupled with a bleak economic outlook have not aided the situation. The burden of a lifetime of mortgage payments is weighing heavily on young homebuyers’ minds. Added to this, a survey with National Savings and Investments showed that a massive 84% of 18-24 year olds believe that buying their first home abroad is more viable than buying it in the UK. The National Savings and Investments survey revealed that in London, 36% of first time buyers would consider buying abroad as an alternative to purchasing in this notoriously expensive city. Barclays’ overseas divisions have reported a twofold increase in the number of enquiries about mortgages for overseas properties.

BARBie Girls and Boys

Unlike Britain, the Bulgarian property market is still buoyant and looks set to grow even further. It seems there is no better time than now to invest in Balkan bricks and mortar. Despite this positive forecast, many first time buyers remain reluctant to actually put down roots in Bulgaria. This could be due to preconceptions about the country which include, fear of the language barrier, its reputation for being a haven for senior citizens and worries about employment prospects. However, before writing off the possibility, younger and first time buyers should consider that there are infinite options open to them in Bulgaria.

UK salaries are disproportionately low when compared to the rising house prices, so it is not unusual for British twenty somethings to opt for a life back home with Mum and Dad instead of venturing onto the property ladder. The high deposit and crippling mortgage of UK property ownership need not elude potential homeowners. A Bulgarian bolt-hole can provide a rental income and potentially build equity if the Balkan market performs according to expectation. With everything these days comes the inevitable acronym, and the young who are investing in overseas homes are dubbed ‘BARBies’ (Buy abroad, rent in Britain). The buy-to-let market is on the up in Bulgaria, which coupled with the country’s very low taxation of just 10% shows there is a huge financial incentive to make your first property purchase there.

A short-term gamble

Alternatively, those after a more short-term fix could consider gambling on the property market in a more conventional way. Bulgarian property offers enormously good value for money and house prices are currently forecast to rise on average by 15% this year. If you’re banking on a quick return, look for up-and-coming areas in the process of regeneration. Similarly, improvements to transport links are usually a sure sign that an area is going up in the world. Low cost airlines tend to have a ripple effect on the surrounding areas of any airport they add to their ever-expanding routes. These airlines are pivotal to the increase in holiday getaways. More and more people are making the most of long weekends and cheap flights for mini breaks overseas. Nowadays, it is normal for people to take frequent trips to second homes instead of traditional, single longer vacations. This broadens the scope for Bulgarian property investment with some regions enjoying both long summers and ski-friendly winter seasons.

Making the move work for you and your job

Those regions with the best transport links offer a compromise between buying for pure investment and full-scale relocation. It is financially possible to live and work between two countries. Working in London and then spending your weekends in Sofia or Varna is now perfectly possible. It’s worth bearing in mind that, under the UK’s flexible working legislation, parents with a child under the age of six and certain adult carers have a legal right to request flexible working hours. Even if you do not fall in this category, it might be worth asking your employer if you can work flexibly. An employer may only refuse a request from an eligible employee should there be recognised business grounds for doing so. With high-speed internet connections available in Bulgaria, employees can take the opportunity to work from their Balkan home.

The brave may want to relocate entirely, which may entail finding gainful employment in Bulgaria. This is easier said than done if you don’t have the necessary language skills. However, you can always solve that problem by buying an established business, or a property with business potential. It is possible to buy a ready-made business and it’s not as expensive as you might expect. There are countless properties with potential to convert to bed and breakfasts or self-catering units. Projects can start as low as £30,000 for renovation projects with the opportunity to market your accommodation facilities to other Brits. The UK is awash with TV shows on property renovation, taking these elements and applying them to a Bulgarian home could pay dividends too. Many will agree that the UK property market is saturated with developers making renovation bargains thin on the ground. By comparison, Bulgaria is packed with potentially lucrative properties, from ready-made holiday apartments to serious building projects.

The Bulgarian property market is recommended for first time buyers as it is undoubtedly more accessible for them than the UK and the savvy should use this to their advantage. Just one shrewd purchase in Bulgaria could fund a future property purchase in the UK – or, you might just love Bulgaria so much you may never want to leave.

Quest Bulgaria top tips to making the right property purchase in Bulgaria:

– Remember to be realistic, if you love living in the city don’t opt for a rural property just because it’s cheaper.

– Check the local infrastructure and how it can benefit your situation specifically. Does your area have good transport links, Wi-Fi, schools?

– Don’t buy on a whim, do as much research as you can into your chosen town, city or village location.

– Be practical and budget. If you fall in love with a wreck, check the renovation costs with a professional and don’t forget to build contingencies into your budget.

– If your move is of a permanent nature, check out the job opportunities. Being a native speaker in a foreign country can give you a specific skill set that may offer new job possibilities.

– Don’t assume that all Bulgarian property is dirt cheap; it isn’t but it does offer better value than comparable property in the UK.

– Never underestimate the difficulty of establishing a business in a foreign country.

– Be aware that the Bulgarian legal system and buying process is different from the UK. Get independent professional advice at every step.

– Avoid buying on impulse. Remember, this is a financial commitment and monetary gains will invariably be reflected in your effort to weigh up the options.

– Get professional and impartial advice and use the same buying criteria as you would in the UK.