Bulgaria property news and articles

While buying property for sale in Bulgaria, and especially when it comes to brand new developments, often marketed off-plan, most British investors are “seduced” by the rent out options of 8-10% annually. The truth, however, is yet to be discovered as few Bulgaria property developments can actually boast realistically such percentages, the majority still being quite doubtfull in their proof of viablity. The following text is the first of series of articles exploring the possibilities for renting out in a market where buy-to-let has been unknown till very recently.

The nature of the Bulgaria property market is very dynamic as the market itself is quite young (roughly 15 years old in its present shape) and as the sellers still dictate its bias. Looking from the stand point of the developers and their agents, or simply from the stand point of the home owners, the recent leap of the prices is the major driving force when it comes to whether to sell, build or both. Combining the popular in Britain menatality of investing for renting out with the local desire for quick profits, many sellers and developpers are tempted to promise unrealistic figures. Aside from few regions along the Black Sea coast and in the mountain resorts, the rest of the country cannot offer even fraction of the easily promissed bombastic returns on investment. Looking deeper into the Bulgaria property market, even the Black sea coast developments are dubious and contingent on too many unknowns.

According to International Herald Tribune 18% of all Bulgaria Property sales had been made by Foreign Customers in 2004. Again another 23% of the total sales on the Bulgarian Property Market have been made by foreigners in the year of 2005. Baring in mind those growing figures it is no suprise investors are offered temptation after temptation playing around the probability game for not merely capital gains but in the short run – income from letting.

All politics is local – how about business?

In a bestseller called “Hardball: How the politics is played told by one who knows the game” a famous phrase comes to mind when we talk business in general. “All politics is local” – so is the business, whether you like it or not. So is the property market in Bulgaria- it is driven primarily by local demand and supply and not by investments from overseas. According to RICS the drastic increase of the value of the Bulgaria Property market could not only be attributed to Foreign Investors. The reason is also the increased demand from Bulgaria property owners to replace their old Bulgarian property. However, in the mentality of the Bulgarians buy-to-let is a concept unknown, and what’s more, relatively unacceptable. Finding a Bulgarian that would buy a property and then allow anyone to use it for 3-4 months in the year, to generate profit from letting is quite doubtfull. Furthermore, letting an appartment in the ski resorts or along the Black sea coast was simply unavailable 5-6 years ago, as there were no “appartment hotels” offered for sale by any developer.

Submitted by: Nickolay Dobrev