Following the boom, boom, boom years in Bulgaria’s property market when the country was being heralded as the next big thing in terms of ski and sunshine resort property investment for jet-to-let returns, all has been quiet of late on the Bulgarian real estate landscape and so it is time to ask the question – ‘what’s happening in Bulgaria’s property market?’
The fact of the matter is, the numbers of construction permits applied for and approved are down, property prices are down, levels of interest are down – and yet agents and constructors are still talking up the market! Is there any point in investing in property in Bulgaria at the moment? Let’s take a closer look.
It’s true, the numbers of permits applied for for new developments across Bulgaria are down quite significantly on 2007 figures. The National Statistical Institute has released the data showing that there has been a 20% decrease in the numbers of construction licenses granted in the last three months compared to the last three months of 2007, and the number is also down compared to the same period last year. This is significant of two things – one, a market where less investor interest exists at developer levels and two, a market where there is concern relating to demand and supply ratios.
There is still significant development under construction in the likes of Varna and Sofia and there are still projects yet to reach completion from Sunny Beach to Bansko, but this will saturate the market in terms of finding buyers to take the properties off the hands of developers – so who will want anything new that is going to be built? Of all the areas still receiving interest among constructors Bourgas, Varna and Sofia are the main three centres of development. And for would be investors, these are the main three areas to consider for current property investment potential. But one needs to understand the fact that the more property that comes to the market means more choice but also more competition if you’re buying in to let or to resell sooner rather than later for capital appreciation.
Bulgaria is not a market with much room for expansion at the moment – the appeal of the country is only so strong and it does have to compete for summer sunshine tourists with Spain and for winter sports action tourists with France – both of which are better established, more accessible and nearer to the UK than Bulgaria. So, in terms of what’s happening in Bulgaria’s property market at the moment, the answer is not a lot and we’re not that surprised!