Real estate investment in Bulgaria is one of the most attractive and capital growth return when purchasing a new build apartment in the Black Sea Coast or Ski Areas
Bulgaria off plan investment apartments in Sunny Beach, Bansko, Borovets, Varna, Sofia
Real Estate off plan property investment in Bulgaria
Property in Bulgaria, by Western European standards is very inexpensive. Bulgaria has so much to offer it is not surprising it is quickly getting more popular as an alternative country for property investment from the traditional South European destinations. Some shrewd investors who bought in Bulgaria two - three years ago have seen the value of their property increase twice and more. However there is still so much potential at the Black Sea Side or Ski resort areas with opportunities for purchasing an off plan apartment from 800-1200 Euros per square meter, but property experts expects these prices rising to 1500-1700 Euros per square meter by 2008.
The average 2004-2005 increase of Bulgarian real estate prices is between 24 % and 28 %. The expectations are slowing down the tendency and keeping a moderate, but systematic pace of increase until year 2007, the tentative year scheduled for Bulgaria to join the European Union.
Local property market is experiencing an impressive revival and there are several factors that contribute to this:
Mortgage lending potential - currently, mortgage loans are 5-6% of the total credit supply within the local banking sector. In developed credit markets, this rate is usually in the range of 14 - 20%.
Increased foreign direct and indirect investment in Bulgarian Real Estate determined by:
» Bulgaria's expected EU membership perspective;
» Expanding tourist industry;
Stable macroeconomic indicators:
» GDP annual growth of 4.5 % to 5%;
» Dropping unemployment rate: from over 14 % to under 11 % for the last 12 months;
» Improved credit rating – BBB-.
» Attractive Return on Investment rates in the real estate sector – on average 15 to 18 percent.
The Real Estate market of Black Sea Coastal areas and Ski areas such as Bansko, Pamporovo and Borovets in Bulgaria has grown significantly since the beginning of year 2002 and more so in the year 2003. Sales prices of brand new Off-Plan properties have increased almost twice in some areas compared to the previous years. Beachfront Properties was on average 30% more expensive than just Sea View locations. Bulgaria is still a popular holiday destination for lower income tourists, which is the main reason for higher demand for smaller and less expensive real estate.
Local market of residential properties in big cities along Black Sea Coast has grown incredibly well. During the last few years demand was higher than supply, due on the one hand to the increased supply of mortgage loans and on the other to consistent migration of workforce from inside the country to Sea Resorts and big coastal urban centres and towns like Varna and Bourgas where more jobs are available. In 2005 the unemployment rate for the city of Varna was 4.5% in accordance with the NSI of Bulgaria. As a result, the price rise on residential property was almost 23% in Varna and 26% in Bourgas.
Plots of land were also attractive for investment purposes. In 2005 their prices had increased more than 28% on average compared to year 2004. Some beachfront plots for development of residential or leisure projects and complexes had reached EUR 100/sq.m. in comparison to similar plots sold at EUR 25-45/sq.m in 2004. In certain areas close to leading resorts like Albena, Golden Sands, Sunny Beach and others, prices had increased more than twice for the previous years and varied between EUR 65-100/sq.m.
According to National Statistic Institute of Bulgaria, the annual real estate prices growth rate is 12.5%. Yet, Sofia is the most expensive real estate market with 28% increase followed by the towns of Varna - 24% and Bourgas - 21%. In the last year the booming was in Bansko where properties have almost double in price then previous years, because of the high demand from foreign investors in Ski areas and the official candidate for the 2014 Olympic Games.
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