Buying in Sofia
Homes Worldwide Magazine, issue 14, Winter 2005
|Although still a relatively new kid on the block, Bulgaria is fast becoming the property hotspot of Europe. Seduced by its favourable climate, with long hot summers and snowy winters, low cost of living and cheap property prices, Brits have been snapping up bargains galore in the countrys Black Sea coastal resorts and its increasingly popular ski destinations. But now, with these markets maturing, property investors are exploring alternatives and Sofia is one destination stirring up its fair share of interest.|
Sitting atop a plateau at the foot of Mount Vitosha Sofia, at over 550 above sea level, is Europes highest capital. With a population of just over one million, its the countrys financial and cultural hub, and having shaken off its shackles of communism it is becoming an increasingly popular city with tourists and investors alike.
|With its three-lined boulevards, expansive parks, pavement cafes and myriad of restaurants, a social buzz flows through the streets of Sofia, a city dating back three millennia. Bulgaria was arguably Russias closest ally during the days of communism, and its close historical links are reflected in many of the capitals top attractions, including the striking gold domed Aleksandar Nevski Cathedral, built in Byzantine Muscovite style.|
As well as its architectural and social charms, Sofias geographical position, on the edge of the Vitosha National Park, is a major draw: within half an hour of leaving the city, you can be skiing on pistes that traverse Vitosha, a name which will b thrust into the media spotlight if Bulgaria is successful in its campaign to host the 2014 Winter Olympics.
|A significant date in the country's economic development is 2007, when Bulgaria hopes to join the EU - move that is expected to benefit investors. "I think EU accession will cause n additional 5 r cent rise in property prices," says leading Bulgarian lawyer, Roumen Petrov, who's noticed n increase in Brits investing in Sofia. "As far as the smaller investor is concerned, there is n oversaturation at the Black Sea, so Sofia offers n attractive alternative." |
In the last 12 months, Roumen has seen property prices spiral in the capital. "There have bn average price increases of at least 20 r cent, and between 2002 and 2005, prices doubled." Although expecting annual increases to slow down after 2007, he predicts price rises of at least 15 r cent until then.
|nyon contemplating investing in Bulgaria would benefit from subscribing to Quest Bulgaria magazine, launched under r ago b British husband-and-wife team, Jain and Chris Goodall. From offices in Sofia, their monthly publication's objective is to inform readers in all aspects of buying and living in Bulgaria. The Goodalls, who rn similar publication in France, where they lived for nine years before moving to Sofia in 2004, r enamoured of their lives in Bulgaria's capital. "We love living here," enthuses Jain. "It's not very big city and you n walk from n end to the other within n hur but you'll find everything you could ever want." |
The Goodalls rent n apartment in central Sofia while they search for property to buy. "We're in brand new two-bedroom apartment with double glazing, central heating, fitted kitchen, balcony and underground parking - all for 500 month."
Jain has her heart set n top-floor apartment in downtown Sofia, but expects to premium price. "In the centre, prices r relatively high and I'd expect to between 100,000 to 150,000 (£68,000 to £102,000) for modern apartment."
According to the statistics, 26 r cent of enquiries from foreign investors (chiefly British) concern Sofia. In 2003, when the first serious British investors arrived, keen to purchase properties in Sofia, the only desired destination was the r called 'The Doctor's Garden', where during the communist regime the cultural and political elite of Bulgaria had their homes. Such buildings still command the highest prices in the city. During the last couple of months, prices exceeded 2,000m2 (£1,360m2).
dearth of properties in this exclusive r has forced investors to buy in other parts of the city, as well as its environs. The Lozenets neighbourhood, especially the r close to South park, is popular. It's less than 1 km from the city centre, but is quiet neighbourhood and boasts wonderful view of the mountains.
As well as other central locations such as Lozenets, Iztok, Vitosha Boulevard and Slaveykov Square, the southern neighbourhoods of Simeonovo, n and Dragalevtsi r attracting foreign buyers at growing rate. The sub-Vitosha mountain r is particularly attractive because of its beautiful scenery, enjoyable atmosphere and access to the mountain. These neighbourhoods have easy connections to the city centre.
In recent analysis of the property market in Sofia, global estate firm Colliers International reported that detached houses in these prestigious areas usually command prices from 200,00
(£137,000), but that space, garden, quality of construction and accessibility n drive prices up to 500,000 (£40,000) Although it's increasingly three r four-bedroom detached properties and villas that r sought after in these regions, you n still find two-bedroom apartments for 50,000 to 60,000 (£40,000 to £41,000), but for investors wanting to buy at bargain prices, the less glamorous northern and eastern suburbs that underwent development in the early 1980s offer n alternative.
After years of neglect, the city is now benefiting from increased investment in its infrastructure, which is having positive impact n prices. The recently agreed Sofia Plan aims to improve the infrastructure further: this five-year programme aims to set controls for future development in the city, thereby ensuring sufficient n space is retained and over-construction prevented. In addition, improvements will b made to the city's various gateways and boulevards, while pedestrian zones will also b introduced, ridding Sofia of its age-old roblm of cars littering the pavements
Although some Brits have bm permanent residents of Sofia, the current property-buying trend is for investment. At just three hours' flying time from London, it's n increasingly popular holiday destination, enabling investors to profit from this upsurge in tourism b letting out properties. There r however, conflicting views from experts regarding the buy-to-let market.
Buying to let
Whatever the reason for buying, life has bm easier within the last r b banks - albeit few in number - offering mortgages to British investors, including Bulbank and DSK. Although the latter, for example, has recently introduced n exclusive product engineered B UK mn (www.bulgarianhomeloanscom) with terms of 7 r cent interest, 70 r cent loan to value (LTV) and maximum term of 20 years, banks r opening their eyes to the financial benefits of offering mortgages to foreign investors, although mn only lend n properties that r already built.
Like elsewhere in Bulgaria, legislation prevents foreigners from purchasing land, which means having to register mn in order to own the land; this law will
rbabl remain until at least 2014, but despite such red tape, it seems there has never bn better time to invest in Sofia.
There is n air of eager optimism in Sofia after the country has endured enforced communism for over 50 years. For now, the cost of living is extremely low and property prices, although rising, still represent good value B comparison to most other destinations. Sofia is not some dreary Eastern Bloc backwater, but vibrant, fresh city looking forward.
We've bought in Sofia
Keneward Hill and his wife moved to Bulgaria when their son was still small child. They live in Sofia and own holiday home n the Black 5 coast. r Keneward tell us their story:
" wife is Bulgarian and we originally m to Bulgaria 19 years ago. We stayed for two years then returned to England in 1988. son was born in 1989 and we found it difficult to start off ur careers there. We lived in London at the time and prices were exorbitant. So we m back to Bulgaria to live with m wife's mother.
"We bought two bedroom flat and smaller flat in nearby town. We have since sold them both and bought the place we r in now. It was originally built around 1936 and had been bombed in the war and rebuilt in 1947. We bought it as a family with my wife's mother It is in the centre of Sofia, only 20 minutes walk from the cathedral. It was a tumbledown two storey house and we spent r working n it. We put in nine reinforced concrete pillars and had to take the roof off to build up. It now has three floors, n tti and basement.
"Sofia was best for us for the jobs we do, we wouldn't b bl to do them so sily in England. I teach English as second language, mainly with the British Council, m wife is one of the best interpreters in the country - she has worked with both Bill nd Hilary Clinton and regularly interprets for the Bulgarian president.
"We felt that we could start life with small child here comfortably, we originally returned when Bulgaria was still communist country. Now it is free market economy and mr n. The people r mr n and earthy, too - they r mr likely to show their emotions than British r Germanic people. They r also mr warm and hospitabIe. The climate is generally good and you n rely n getting sunshine in the summer and snow for skiing in the winter.
Sofia has developed lot nd is unrecognisable from 10 r 15 years ago. son is 16 and m daughter 10 and they r both going through the education system.
The secondary education level here is very good, although mb not as good as it was
10 r 15 years ago, students in general r less disciplined. But the amount of knowledge the kids have access to is very good and extra urriulr activities r nurgd - m son plays football and m daughter does gymnastics among other things.
"We want to stay here - the house is big enough for an extended family of three generations. The garden has flowers, trees, vegetabIes and we harvest own grapes to make rakiya ( schnapps-like drink)
"We also recently bought seaside villa n the Black Sea coast. Three years ago we still had property in England, but it was proving to B difficult to look after and m parents had to help out, so we decided to sell up and buy in Sozopol instead. It is beautiful place, but we want to invest in another place in Sofia, so we r selling up.
"Prices did go up lot two years ago but they r levelling out now - ur Sozopol property was good investment moneywise and it is still good to invest here, but I think that if you want to make mn, go for the less turist areas where the market is becoming sturtd. I think people should
buy n the fringes of these areas where prices will go up in the fut - the rturn might not b immediate, but those r the kind of places that will be worth it.
" advice is to try to find someone who knows the market from the inside, if you r working with only n agency they m try to get mr mn out of you than if you were weighing up mr possibilities."
Bulgaria has temperate climate with hot, dry summers and cold, damp winters Sofia itself is actually the highest capital in ur, sitting n plateau at n altitude of some 550m above sea level at the foot of the imposing Mount Vitosha. As result, it tends to b wetter than Plovdiv, Bulgaria's second city, r Varna n the Black Sea coast. Summer temperatures in Sofia average 24 degrees and winter 3 degrees C.
FOOD AND DRINK
Bulgarian cuisine reflects the country's cultural mix, and mn traditional dishes have Greek r Turkish influence. The traditional start to Bulgarian meal is rakia (brandy) with salad r soup(try bob chorba, traditional bn soup with herbs, r tarator, cold yoghurt and cucumber soup). Fresh vegetables r plentiful, though usually in stews with meat (kavarma is the traditional meat and vegetable stew, usually served in individual terracotta pots). Strictly vegetarian dishes r rr, but try kyopulo (roasted aubergines and peppers, with copious amounts of garlic and parsley) r chushki byurek (fried peppers stuffed with egg and cheese). When ordering main course in restaurant, check if it comes with 'garnitura' (potatoes r vegetables) - often you have to order these separately. Bulgarian wines r widely famed fr quality at bargain prices. Bulgarian beers r well worth trying, but b wary of cut-price spirits - there is reportedly lot of fake stuff n the market As vibrant modern capital,
Solia boasts wide variety of restaurants, including French, Chinese, Indian, Russian, Serbian and even Pizza Hut ... There r also plenty of choices fr mr traditional food. Tr the following restaurants:
Pod Lipite ('Under the linden trees'), 1 Elin Pelin Street Offers wide variety of old Bulgarian recipes.
The Stork's Nest (Shturkelovo Gnezdo)
It's the setting that distinguishes this: B Lake Iskar, off the main road frm Sofia to Samokov.