After several years of continuous falling prices, the Bulgarian market is gradually recovering. Despite the fact that Bulgaria remains one of the least affluent countries in Europe, recently the average salary level has been quite high, which stimulated the population to buy real estate.
History
Against the background of rapid economic growth in the period from 2000 to 2008, Bulgaria experienced a boom in the real estate market. During this period, the increase in real estate prices amounted to 300%. Bulgaria's accession to the EU in 2007 was particularly stimulated by the price increase.
However, in 2008, the "bubble" in the market burst due to the global economic crisis, and prices began to fall sharply. In 2009, the drop was 26.31% compared to the previous year, in 2010 – 5.58%.
In 2011, prices in major cities of Bulgaria remained relatively stable, but due to a decrease in demand, the cost of housing fell. Real estate prices have fallen from 5% to 10% compared to 2010. By the end of 2011, housing fell in price in 20 regions of Bulgaria, prices fell by 6.1% compared to the previous year (8.67% in real terms). The average market price for real estate in the country during this period was 887.57 leva (454 euros) per sq.m.
At the beginning of 2012, prices decreased by 4.3% compared to 2011 and were 38% below their peak level in the third quarter of 2008. Nevertheless, the price index of the third quarter showed that in 2012 prices stabilized in Sofia, and in the popular resort of Bansko they decreased by only 10%. In addition, since 2012, foreign investors have started to return to the Bulgarian housing market again. British and Irish investors handed over the palm to Russian buyers.
The volume of construction of residential buildings started decreased by almost 6% in 2012 compared to the previous year. At the same time, the number of Russians who bought real estate in Bulgaria in 2012 increased by 10%. About 85% of the purchases of housing by Russians accounted for real estate on the Black Sea coast.
In 2013, the market stabilized. Over the year, the average cost of real estate in the country decreased by only 1.21%, reaching 442 euros per sq.m. However, taking into account inflation, prices not only did not decrease, but even increased by 0.38%.
Sales volume also increased significantly in 2013. An increase of 17% was recorded for this year. At the same time, a significant share of the total volume was made up of purchases by foreign investors. Investors' interest switched to seaside resorts – the volume of sales of coastal real estate increased by 20%. Also in 2013, a minimal decrease in apartment prices was recorded – 1.21% in terms of 1 sq.m.
The beginning of 2014 was a turning point for the Bulgarian real estate market. After a year and a half of continuous decline, housing prices in Bulgaria increased in the first quarter by 0.2% compared to the previous quarter, reaching the level of the first quarter of last year.
In the first quarter of 2014, sales also increased by 15% compared to the same period in 2013. The decrease in mortgage interest rates and the stabilization of real estate prices increased the demand of buyers in 2014.
In the second quarter, the number of permits for the construction of residential buildings increased by 10.4% with an increase in the number of apartments by 2.1%. The volume of construction of residential buildings increased by 61.1%, the number of apartments under construction – by 38.2%.
In the second quarter of 2014, prices increased by 2% compared to the same period last year. Compared to the previous quarter, an increase of 1.79% was also recorded. Thus, the period of falling prices can be considered completed. According to many experts, stable and balanced price growth is expected by 2015.
Sofia
The demand for real estate in the capital of Bulgaria is consistently the highest in the country. Sofia is the financial, industrial, and cultural center of the country, whose history dates back about seven thousand years. Today, the center of the capital rather resembles a modern European city.
Recently, Sofia has been increasingly competing with Black Sea resorts for demand among tourists and property buyers. The city has favorable climatic conditions, the Vitosha Mountain ski resort, as well as numerous mineral springs outside the city.
The highest real estate prices are in the central districts of the city, among which such popular as Lozenets and Yavorov. When renting an apartment in the center of Sofia, you can always count on a stable income from 4% to 6%.
In 2010, the asking price per square meter in Sofia was about 1100 euros, and in 2011 the cost dropped to 920 euros. At the beginning of 2012, real estate in Sofia fell in price by an average of 6% to 433 euros per sq. m. At the end of 2012, prices in Sofia fell by an average of 4-6%, while in the whole country the maximum decrease was 4%.
At the same time, in 2012 there was a significant improvement in the market situation – if in the last quarter of 2011 the average price per square meter in Sofia was 730 euros, then in the first quarter of 2012 this figure was 735 euros. In just 4 years from 2008 to 2012, the average price of a two-room apartment in Sofia fell by 30%.
At the beginning of 2013, the cost real estate in Sofia was 725 euros per sq. m. In 2013, real estate prices in the capital decreased by 0.9% to 736 euros per sq.m. At the same time, sales increased by 10%. Since the first quarter of 2014, there has been a slight increase, and already in August prices increased by 0.92%, amounting to about 740 euros per sq.m.
Black Sea resorts
The real estate of the Black Sea resorts is the most popular among Russian buyers. The creation of modern resorts on the Bulgarian coast began in the mid-1960s, and they were intended primarily for citizens of the Soviet Union. Having been popular for many decades among Soviet and Russian tourists, in recent years this region has also become the main market for foreign real estate for buyers from Russia and CIS countries.
The largest resort area of the coast – Sunny Beach, located north of Burgas. Other major tourist centers are Elenite, Dunes, Nessebar, Pomorie, Sozopol, Primorsko and Kiten. In recent years, very small towns have also been developed - Ravda, Tsarevo, Sinemorets, Chernomorets and Sveti Vlas. The Golden Sands located in the north – in general, more
Sunny Beach is the most popular place to invest in real estate. The resort is located in the southern part of the Black Sea coast inside a small semicircular bay at the foot of the Stara Planina mountain range, about 35 km north of the city of Burgas. The length of the beach is approximately 10 km, and the width reaches 150 m. In general, experts note that since 2008, real estate in Bulgaria has fallen in price by 35%.
Burgas
Burgas is a large resort town located on the southern Black Sea coast of the country. It is an important administrative, economic and tourist center of the southern Black Sea coast. In addition, Burgas is the second largest city on the coast after Varna. About 200,000 people live here. Recently, there has been a tendency for Russians to move from coastal resorts to large cities, mainly to Burgas. This is due to the fact that real estate in small coastal resorts are intended for recreation only for the period of the tourist season, in winter the infrastructure is not comfortable enough.
Unlike located on the north coast of Varna, Burgas is a quieter resort town, not too populated by visitors from other regions of the country. In 2010 and 2012, it received the title of the best city to live in Bulgaria. In addition, Burgas claims to be the cultural capital of Europe in 2019.
In 2008, apartments with two rooms in Burgas could be bought for about 60,000 euros. But since the beginning of 2009, due to the financial crisis, the Bulgarian real estate market has been experiencing a prolonged drop in prices. In the spring of 2011, the average cost of secondary housing in Burgas was 600-800 euros per sq. m. At the end of 2011, the average cost of housing in Burgas fell to 860 euros per sq.m. At the beginning of 2014, as throughout the country, real estate prices in Burgas rose slightly, averaging BGN 1110 per sq.m.
Varna
Varna is the main city of the Black Sea coast of Bulgaria and the third largest city in the country. The most popular Varna real estate – small holiday homes near the coast. Like Burgas, Varna is attractive because you can live here all year round – thanks to the developed urban infrastructure, life here does not freeze in winter. In this regard, despite the general crisis and falling prices, there has been a boom in the Varna real estate market in recent years, and demand is constantly growing. So in 2011, Varna overtook the capital in terms of prices – the average price per square meter was 744 euros.
At the beginning of 2013, the average price of real estate was 720 euros per sq. m. In the first quarter of 2014, Varna –the second city after Sofia in terms of the high cost of real estate – BGN 1370 per sq.m. In August 2014, prices increased by 13.3% compared to August 2013.
Balneocourts
A separate resort market real estate in Bulgaria are balneological resorts. Currently there are about 1,600 mineral springs in Bulgaria. The most popular of them are Pomorie, Sandanski, Velingrad, Pavel–banya, Hissar, Devin, Kostenets, Bankya, Sapareva-banya, etc.
Real estate in the balneological resorts of Bulgaria is just beginning to arouse interest among foreign investors. Balneo and spa tourism operates all year round, therefore, we can expect favorable prospects from investments in real estate.
Average real estate prices in balneological resorts in Bulgaria range from 500 to 1100 euros per sq.m. The lowest prices are now observed in Velingrad, where since the crisis of 2008 the price level has decreased by 20%. The most expensive real estate is located in Pomorie.
Ski resorts
Another popular type of real estate in Bulgaria is houses in the country's ski resorts. The attractiveness of Bulgarian ski resorts, both for recreation and for buying a home, is quite high. This is due to the European level of service and, in general, affordable prices in comparison with similar Western European resorts.
The most popular winter resorts are Bansko, Borovets and Pamporovo. Here you can find real estate of both medium and high price categories. In summer, Bulgaria's ski resorts are usually empty. The exception is Bansko, where many visitors from Europe come in the summer, as it is a modern city with a developed infrastructure.
Bansko can be called the main ski resort in Bulgaria. There are many luxury hotels, quality restaurants and residential complexes in the historical districts of the city. Pirin National Reserve is located not far from Bansko.
In 2011, of all the cities in Bulgaria, the largest decrease was observed in Bansko, where prices fell by 25%. In 2013, apartments with two rooms in Bansko have fallen in price by 57% in three years and now cost from 13,000 to about 79,000 euros. Three-bedroom apartments in Bansko have decreased in price by 3% over the same period and cost from 12,500 to 120,000 euros. As of August 2014, real estate prices in Bansko decreased by 5.6% compared to 2013. Now the average price is about 400 euros per sq.m.
Market prospects
Russians are the main buyers of Bulgarian resort real estate among foreigners. The tension of the international situation since the beginning of 2014, Russia's confrontation with Western countries, as well as a series of sanctions by the EU and the United States could not but affect the demand of Russians for foreign real estate, including in Bulgaria. Moreover, Bulgaria is the most popular mass market of foreign real estate for Russians.
Due to two multidirectional trends – the recovery of the market and a decrease in the demand of Russians – the situation in the resort real estate market and further growth prospects remain unclear. In addition, after the incorporation of Crimea into the Russian Federation, Bulgaria has serious competition for the demand of Russian buyers of real estate.
About the current state of the market and what prospects for the development of the situation can be expected, HomesOverseas.ru experts working in the Bulgarian real estate market told us.
Mikhail Kiselyov, Managing Director of the agency "Bulgarian House":
"Undoubtedly, the situation around Ukraine has affected the demand for real estate in Bulgaria. Some potential buyers refused to buy in anticipation of the settlement of the conflict, while the other part monitors the exchange rate of the ruble against the euro and the dollar. Against this background, customers have become more accurate in forming a request and selective.
Today, the leaders of demand are new facilities built in resort areas using high–quality materials, in which the attitude of the management company is not the least. Due to the increasing complaints about poor management and "extortion", foreign buyers began to pay more attention to infrastructure and support of complexes.
Following the leader, I would like to note the objects of the city plan. This type of real estate is chosen by those who want to live in Bulgaria all year round and have a constantly working infrastructure "at hand". Sofia, Varna, Burgas are the most favorable cities for living in Bulgaria. Those who do not want to live in the city, but on the ground, and at the same time need proximity to infrastructure, choose villa zones and villages adjacent to large cities. In any case, it is important to know exactly the purpose of the purchase.
And finally, most buyers understand that "cheap is never good," and therefore, more attention is paid to objects in the above-average price category. Those who are planning to purchase in the low-budget category should pay more attention to the quality and documentation of construction."
Polina Malysheva, Head of the Moscow branch Premium Group:
"The number of applications, the demand for inexpensive real estate in Bulgaria has decreased. Bulgarian state authorities also note a decrease in the number of registered real estate transactions. But sellers have not yet responded to the decline in demand. Prices do not fall, do not decrease.
I absolutely do not predict an increase in real estate prices in Bulgaria, the supply now exceeds the demand, and in the future, with a drop in demand, developers and sellers in the secondary market will either have to lower prices or refuse to sell until better times.
Crimea was a real competitor to Bulgaria. Low-budget applications (up to 30,000 - 35,000 euros) - for the most part turned out to be non-working, buyers with a low budget are looking towards buying real estate in the Crimea. And if they haven't made a final choice yet, then the percentage of returning interest in Bulgaria, in my opinion, will be quite small.
As for the regions, the Black Sea coast is consistently of interest in Bulgaria. Sveti Vlas, Pomorie, Ravda, Sozopol on the Southern Black Sea coast are the most active in construction and sales. It is also possible to note the interest of buyers in real estate in the cities of Burgas and Varna - intended for year-round living or renting.
Given the ease of obtaining a residence permit in Bulgaria, I am sure that the attention of buyers will shift towards large cities rather than small resort towns."
Oleg Cherenchukin, Member of the Board of Investment and construction holding "Premium Property":
"Bulgarian real estate is most in demand among Russian families with children. Sunny Beach is especially popular with this audience. Russian pensioners especially prefer Ravda, Pomorie. New buildings in Burgas are also in great demand – among those buyers who want to combine urban infrastructure and recreation by the sea.
Cities such as Varna, Golden Sands, lag behind in popularity, as Russian buyers are very demanding of infrastructure. Therefore, Russians, buying a house in Bulgaria, tend to the Southern coast.
The situation with Crimea has not affected the Bulgarian market in any way. Real estate prices in Crimea are comparable to prices in Spain, France. At least for this reason, Crimea is not a competitor of Bulgaria.
As for the prospect of price growth, it exists in cities such as Varna, Burgas, Sunny Beach – that is, in places with extensive infrastructure, where there is no place for further development. In popular resorts with limited, but still accessible territories for construction (Ravda, Sveti Vlas), prices remain at the same level. At the same time, it can be predicted that in cities with insufficient infrastructure and large areas for development, such as Byala, Chernomorets, Primorsko, etc., prices will only fall."
Larisa Kostadinova, director "Aurora-plus":
"Our company has been active in the Russian market since 2006, and if initially Russian citizens until 2009-2010 bought mainly apartments in resort complexes along the Black Sea coast, then in recent years, especially in 2013 and 2014, they have been buying apartments in Burgas for year-round use. In this regard, there is a slight increase in the prices of 1-bedroom apartments in Burgas, in the districts of Center, Vozrozhdenie, Lazur, Zornitsa. In the same areas, the purchase of apartments by Bulgarians has also increased.
In the resort complexes themselves – Sunny Beach, Golden Sands, Sveti Vlas, Primorsko, Tsarevo – secondary sales for lower prices from the British, Irish and Russian citizens appeared.
If in 2006-2008 prices at these resorts in the range of 1000 euros /sq.m were considered among the lowest, now the secondary market offers prices from 550 euros / sq.m to 800 euros/sq.m.m apartments are furnished and equipped. The appearance of Crimea on the Russian real estate market has not yet been reflected in the real estate market in Bulgaria."
Svilen Lyubenov, Managing Director of the company Century Homes:
"I personally think that the prices forreal estate should not increase dramatically. There is always real estate, which, due to its specifics, will be expensive, but in general I expect to maintain the existing level.
The political situation has a negative impact on the market, because Russian citizens do not have guarantees about Russia's policy, and relations with the European Union are changing. We work in the Veliko Tarnovo area and I can say that there are customers, and everything remains as it was."
Milena Milenkova, Imoti Bansko BG:
"As for the dynamics of the market, there is an outflow of buyers, not dramatic, but there is a difference in sales in the summer, and the reason for this is the sanctions. Prices, in general, remained unchanged.
I don't think Crimea will compete, because the Bulgarian market is cheaper than the Crimean one and offers more opportunities. Russians love the sea, but there is already a tendency to buy real estate in mountain resorts – Bansko, Pamporovo, Borovets. Russians like Bansko because it is a small and quiet town where you can live all year round, and not just in winter. More than 50% of foreign buyers in Bansko are from Russia."
Daniil Burygin
HomesOverseas.ru
Let,if possible, what is the environment in Burgas, including the airport industry.
Where is the best place to buy an apartment in Bourgas district (near the sea)with the aim
of renting it through a management company.
Where does the sewage from the city of Burgas?
Thank you.
Sincerely,
Vlad