Sun and ski in Bulgaria
Article in Sunday Business Post * with excerpts, 10th April 2005
|According to property market experts, the property investment market in Bulgaria will pick up over the next few years, as tourists move away from hotel accommodation in favour of holiday apartments.|
We're anticipating a huge increase in property sales for 2006 as more and more holiday companies come on board. There is still good value to be found here for the next three years.
Last year, more than four million tourists visited Bulgaria on sun and ski trips. Bulgarian resorts located along the Black Sea have long found favour with eastern European tourists.
< Grand Montana in Bansko
|More recently, the country's preparation for entry into the European Union in 2007 has opened it up to a wider European tourist market. The stability of the Bulgarian property market is also on the increase,with property appreciation rates averaging 22 per cent last year. The relative affordability of property in the country - prices start from 30,000 Euro - is attracting a growing number of Irish buyers. A number of Irish developers are also investing in major developments at the upper end of the market. |
For investors, such activity is good news, as it creates competition among developers, many of whom provide rental guarantees, full buy-to-let packages and locally-arranged finance.
Sunset Apartments near Sunny Beach
New building in Sofia
|Everything in Bulgaria is about potential and people are going there primarily for investment more than holiday homes. Improvements in infrastructure, cheaper access through open skies' deregulation and greater integration with the rest of Europe, through EU accession, are other factors driving market expectations. |
The Bulgarian property market can be divided into three areas - sea resorts, ski developments and city properties, most notably in the capital Sofia. Rural developments are also starting to come on stream, offering unspoilt countryside and easy access to the country's 120 spa resorts and natural springs. However, limited access to infrastructure, including electricity and water, means that most new developments are clustered around the main resorts.
The average prices for the Black Sea resort of Sunny Beach, for instance, start at 1,200 Euro per square metre, with ski resorts starting from 700 Euro per square metre. If you get a villa or house with a nice plot of land, you can pay about 1,100-1,200 Euro per square metre.
Restrictions on land purchases do apply in some cases. In general, land in Bulgaria can only be bought through limited companies. However, it is possible for individuals to achieve limited company status in a matter of weeks. The higher end of the market is undergoing rapid development, with major luxury developments springing up in areas surrounding the main resorts. Sunny Beach, the country's largest Black Sea resort, remains the primary focus of most new development, although Bulgaria's ski resorts are starting to attract considerable investor attention.
A growing number of developers are opting to include private golf courses in many developments. This, combined with access to ski slopes and beaches, is the primary market driver. These provide access to the amenities of the bigger resorts but with the seclusion they cannot always offer.
Lapland Complex in Pamporovo
Undiscovered areas include Pomorie, Sozopol and Arapya along the coast. The ski resort of Borovets is also becoming more popular. There are a few very good opportunities around Sofia, like the Bankya and Pancharevo areas. The ski resort of Pamporovo is also finding favour with tourists as an affordable ski holiday destination.
According to commentators, property values have increased five-fold in some cases over the last four years. However, the market has slowed somewhat. Official figures put it at an average of about 25 per cent last year, averaging 15 to 25 per cent over the next four to five years. Last year, there was a 22 per cent rise in the average value of Bulgarian property, according to the Bulgarian Real Estate Market Index.
Law and tax
With Bulgaria's entry to the EU set for 2007, regulation in the local property market is on the increase. There are plenty of safegaurds in place to protect investors, but caution is still required. As with anywhere else, it's important to get the right legal advice.
Bulgaria is a signatory on the Treaty for the Prevention of Double Taxation with Ireland in principle. Income tax in Bulgaria follows a progressive scale of 15-29 per cent, while government stamp duty is payable at 2 per cent. Notary fees and agent commission is about 4 per cent. The rate of tax on real estate not used for residential purposes is 0.15 per cent.
Buy property in/near beach resort
Buy property in/near ski resorts
Invest in the capital of Bulgaria