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Market in Bulgaria?

Discussion in 'Bulgaria Property' started by farren, Sep 8, 2008.

  1. farren

    farren Banned

    Hi Need some help ,What is housing market like in bulgaria .If you where to buy plot build then try to sell .Is there a sellers market there.Thanks
     
  2. NeilHollingsworth

    NeilHollingsworth New Member

    It would have to be very special and close to either the beach, golf courses or the ski lift. Might be better things to invest your money in.
     
  3. thetravelbug

    thetravelbug Banned

    Much depends on where you buy, what you build, sale price....
    The rural property market in Bulgaria is still very active and lower price properties are becoming harder and harder to find. Buying decent building plots and sitting on them for a year or two is a good idea.
    I do not agree your property has to be close to the sea, golf or ski lift. Many people now are completely avoiding the over developed and hyped regions around sea, golf and ski resorts and instead opting for traditional village houses in pretty areas, near spa facilities, walking, fishing etc....
    Sure it is harder to sell property priced at the top end of the market (which can be anything above 50,000E) but there is a small market there for it.
    But if looking to make money think you would be better investing in several plots or older houses in good locations, sitting on them, tidying them up a little and selling on at later date.

    Rachel
     
  4. Flyerman

    Flyerman New Member

    If you can pick up quality and prime location coast / ski / city new property at 600 euros per m2 that could be the least hassle, lowest purchase risk and safest investment of all. There will be and are forced sellers facing foreclosure measures but getting quality will be the challenge at low / discounted prices.

    If its certainty of rental income that you are after, then i would agree there are possibly better countries to invest in.

    Lance

    PS You may want to bear this news story below in mind. Long term its good news. Property and land should be long term investments and the prevention of more overbuilding now will sow the seeds for recovery some time in the future.

    Property developments worth over 2B euro put on hold
    20:55 Wed 24 Sep 2008 - dnevnik.bg


    The effects of the mortgage meltdown in the US and the subsequent global financial fallout are slowly being felt in Bulgaria, with property developers putting projects worth over two billion euro put on hold.

    The crisis is hitting hard across the board, business climate is changing and no sector will escape unscathed, Rossen Plevneliev, manager of property developer Lindner Immobilien Management, has said. Next year will be a tough time for businesses, but 2010 may see the light at the end of the tunnel, he said.

    Entrepreneurs were wondering whether to go ahead or pull out of projects, according to Tihomir Tsakov, owner of local real estate agency Aristo.

    Under pressure by shareholders, property funds have already started selling out assets. Private equity firm Equest sold its City Center Sofia shopping mall to US real estate investment management firm Heitman at a humble profit of 7.5 million euro earlier this week and the company’s cinema halls have also been put up for sale.

    Immoeast AG, the Austrian real-estate developer that focuses on Eastern Europe, unveiled plans to freeze or abandon projects worth two billion euro to bolster liquidity. The company has not given details whether Bulgarian projects would be affected.

    The property funds listed on the alternative segment of the London Stock Exchange are also shedding Bulgarian assets after their share prices halved in the past year.

    Bulgarian Land Development placed on the block its projects in Borovets and Kavarna; Black Sea Property gave up on its Tsarevo development; Bulgarian Property Development halted its investments in Bansko.

    The holiday property segment was hit the worst with the number of deals shrinking by 10 per cent, according to data from the Registry Agency.

    Speculators are fleeing the market and selling homes for virtually no profit at 600 euro a sq m, Nikolai Pehlivanov, director of investment company Green Life, said.

    Foros real estate agency said that some 50 000 second-home properties are up for grabs on Bulgaria’s Black Sea coast. Soaring loan prices are dragging the urban property market as well.

    Foreign direct investment, a large part of which has gone into the property market since end-2005, shrunk by about 500 million leva in the first half of this year compared to the same period of 2007.
     
  5. thetravelbug

    thetravelbug Banned

    Interesting article but not surprising.
    Would still avoid even prime areas in coastal and ski resorts. Stuff easy to find for 600E/sqm. I get emails nearly everyday from people wanting to sell off their apartments for half price just to get out. Sticking to low cost, good plots is your best bet, prices unlikely to drop despite economic prices and from my experience British buyers still looking for good plots to build on for their future home.
     
  6. Flyerman

    Flyerman New Member

    Its very area dependent and like I'm keen on land and rural locations, just like travel bug. However its not for everyone as not everyone wants the rural BG life.

    As mentioned by travel bug, there may be fewer distressed sales in the rural house/land market - I don't know. My theory is that now COULD be better time to buy apartments.

    It is, as always, about location. In a sought after area, for example, I (Jet2Let Property / Overseas Property Talk) have a few apartments fully complete in Alen Mak in Varna.

    Why could these be good deals? Well its always a good idea to break property down into the component costs. The land would sell per apartment, these days, for around 100 euros per m2, it costs around €450 per m2 to build plus taxes and vat. Whilst its all about supply and demand, my view buying ready made apartments in sought after markets could a smart investment.

    So, in popular areas it going to cost around €700 per m2 to build, before any developer profit. And any calculation on the opportunity cost of lost interest on land investment, build financing costs, architect fees, regulation cost & hassle and time has not been accounted for.

    I know some may say you can build less and that land doesn't cost this much. But I'm talking very good location, sea view.... and very rough numbers to make a point for debate. I'm not talking about second line Sunny Beach.

    When discussing the topic of assigning a value to your time then this is hugely variable. It may range from zero (if retired and its a hobby) to the price per hour of a top UK plumber :). .. worth more than investment bankers these days, or so I'm told. We are talking about 10's or 100's of hours to bill if you have a time to account for!

    Looking at Bansko, for example, I believe if you can buy within a 300 (genuine google earth) metres from the entrance of the gondola at €700 / €900 per m2 then this could be an easy, and low risk, investment. In fact, anyone knows of any deals at these prices please contact me. Especially if the apartments have already been furnished.

    Somewhere like Bansko Royal Towers would be perfect at this price. Well under cost and fully furnished - even good rental prospects. As I say, if anyone has product to sell at this price then please let me know as I have several cash rich investors who remember the 70's 80's and 90's recessions and the money to be made at times like these.

    Yes, there is a large stock overhang, but this fact is not a historical first and eventually it will change (in some locations quicker than others). Patience may be required but looking ahead new builds now drastically reduced so the seeds of recovery have already been sown.

    Who knows what timescales for a return, but if that's not important to you then this is an investment strategy worth considering.

    Good debate and look forward to comments from buyers and agents.

    Lance
     
  7. okisen

    okisen New Member

    hi farren, yes there is a sellers market. i think the best bet is to concentrate on large cities where the local population is becoming more and more affluent and are looking to upgrade their accommodation. ive sold 3 of my own plots to bulgarians, and have received an offer for a fourth. this is in the Varna area. Varna is booming at the moment, both populationwise and economically.
    the economy iin bulgaria is growing 7% this year and is projected to grow 6% in 2009, so bulgaria hasnt really been affected by the credit crunch like western europe.
    do your research and u will do well.
    kas
     
  8. okisen

    okisen New Member

    ULGARIA’S FDI ON THE RISE IN 2008, SAYS INVEST BULGARIA AGENCY
    18:20 Wed 24 Sep 2008 - Clive Leviev-Sawyer

    Invest Bulgaria Agency chief executive Stoyan Stalev told a news conference on September 24 2008 that Bulgaria got 2.84 billion euro in foreign direct investment (FDI) in January to July 2008.

    This was an increase of 200 million euro year-on-year, Stalev said, as reported by Bulgarian news agency BTA.

    He was speaking at the unveiling of the 2008 World Investment Report entitled Transnational Corporations and the Infrastructure Challenge. The report was presented by the United Nations Development Programme, Confederation of Employers and Industrialists in Bulgaria and Invest Bulgaria Agency.

    Stalev said that a total $16 billion was invested in Bulgaria in 2006 and 2007, more than 50 per cent more than the sum of FDI in the 16-year period after 1992.

    He said that for the first time, the report classified Bulgaria among European Union states rather than in the South Eastern Europe category.

    Stalev attributed the growth of FDI in Bulgaria to low taxes and the currency board arrangement that pegs the leva to the euro to keep the local currency stable.
     
  9. okisen

    okisen New Member

    RESIDENTIAL PROPERTY PRICES IN BULGARIA CONTINUE TO RISE
    16:14 Fri 18 Jul 2008 - Svetlana Guineva

    House prices will jump between eight and 15 per cent in Q2 2008
    House prices for the second half of the year are expected to jump between eight and 15 per cent, real estate agency Foros forecast, as quoted by website investor.bg.

    For the first six months of 2008, a significant increase has been registered in Rousse, by 24 per cent, which brings the Danube city closer to the price range in Sofia and Varna. In the Bulgarian capital, residential property prices have gone up by nine per cent, while housing in Bourgas has become more expensive by six per cent and by seven per cent in Varna, respectively. In Plovdiv residences are selling for 20 per cent more than the last year, whereas in Veliko Turnovo is close to posting a 13 per cent hike.

    Foros also estimated in their forecasts that demand for residential property until the end of 2008 will remain steady as the most popular among buyers are gated and semi–gated residential communities. People, however, prefer to buy in the periphery of the big cities where property prices are still managed low, the agency was quoted as saying.

    Two-bedroom flats hold the top of the list for most-desirable residence, but spacious three- and four-bedroom flats are becoming more appealing in recent months, according to Foros. Buying off plan is a tendency that is beginning to significantly decline, the brokers have said.

    According to company’s compiled data, at the end of June, Bulgarian residential property offered a return on investment index of close to six per cent, which equals to the average rate in Europe. In Sofia the return rate also comes to six per cent as the highest nine per cent in the country are registered in Veliko Turnovo.

    Foros indicated earlier that for the first six months of the year rents are also on the rise as demand is for flats in luxurious new buildings with expensive furnishing.
     
    Last edited: Sep 30, 2008
  10. Flyerman

    Flyerman New Member

    Yes, by all accounts Varna land prices are very high now. The fall in enthusiasm for off plan is understandable given that their is more risk associated with this. I also would agree that some larger units and houses may show the best price increases in areas where there is a shortage. I wonder if the very wealthy Russian buyers could start making a really big impact on the high end. any views on this?

    Economically Bulgaria will not be immune to the business slow down, a large part of wealth has come from construction and with few off plan starts that sector could slow down. Perhaps not as dramatic as we are seeing in Spain - but the impact could be significant on GDP growth.

    On the positive side Bulgaria may also benefit as companies are searching for low corporate tax rate of 10% and low labour rates. Skilled worker salaries will increase and boost GDP.

    So I'm look forward to seeing how property and land prices have moved in various locations over the nest 12 and 24 months.

    If you hear where Russian folks are buying land / property its well worth while investigating some more. They could bring many more of their friends looking to spread risk and move some money out of Russia into an EU country. Just a theory of course.

    Regards,

    Lance
     
  11. okisen

    okisen New Member

    hi heres an article i found about russian buyers from earlier this year: article is from here: The Russians are coming...the Russians are coming - Opinion Article

    THE RUSSIANS ARE COMING...THE RUSSIANS ARE COMING
    17:00 Fri 08 Feb 2008 - Julia Titova in Moscow
    Why are Russian buyers so drawn to Bulgaria?

    The Russian appetite for foreign real estate is still in its infancy, particularly compared to the overseas buying frenzy among the British. Yet there is every sign that Russian buyers are on the move, aided by a flourishing domestic economy and an ever-widening choice of overseas bargains.

    Russians started to buy real estate abroad about a decade ago, beginning in Spain and Cyprus. About five years ago, somewhat tentatively at first, they gravitated towards Bulgaria. Over the few years, however, Bulgaria has been one of three leading target countries for Russians. During 2007 Bulgaria became the unequivocal favoured destination for Russian buyers, attracting 23 per cent of those who decided to buy abroad, followed by Montenegro (17 per cent), Spain (16 per cent) and others (10 per cent and less). In total, Russian purchases of Bulgarian real estate more than doubled (113 per cent) last year. Now Russian real estate purchases in Bulgaria are on a par with English-speaking buyers.

    Russians are drawn to Bulgaria by its climate and the closeness of the two cultures. Bulgaria and Montenegro are extremely popular with Russian buyers. Both countries are Slavonic and Orthodox with a history, culture and language similar to Russia's. So when Russians come to Bulgaria they feel at home. They also prefer Bulgaria to potential rivals - such as Poland or Serbia - because of its superior climate and relatively lower prices.

    In particular, Russians are attracted by Bulgaria's coastline. More than 80 percent of Russian buyers in Bulgaria choose Black Sea properties. Most Russians buy apartments for their own use during the summer and are very satisfied with their purchases. Russians especially enjoy spending family holidays in Bulgaria. This is a great alternative to Russia's own coastal resorts where services are poorer and prices higher. Buyers are interested in holiday homes for their own personal use and for investment. They like to buy off-plan, because this offers cheaper prices as well as a special investment payment scheme with discounts. It also allows them ample time for payment during the building period.

    Other areas of Bulgaria are less popular with Russian buyers. Less than 10 per cent of Russians, for example, buy in mountain resorts. Russians enjoy skiing, but they do not like to ski at the same location every year. The result is that those who buy in Bansko or Pamporovo do so mainly as investments. Golf is not particularly popular with Russians either, so those who buy near golf courses do so in pursuit of rental profits. Nevertheless, experience shows that profits are not as high as in their domestic market.

    Few Russians buy in big cities - such as Sofia and Plovdiv - or resorts like Velingrad and Sandanski (just two to three per cent each). Not many Russians would need a business base in the Bulgarian capital and few Russians choose to visit a Bulgarian spa town. Also, profits from spa tourism are not particularly high, resulting in a lack of clients in this sector.

    I hope that Russia's economy and political background will remain stable. If this happens, Russian interest in overseas property, which is growing very rapidly, will continue. Everyone knows, for example, that London is very popular with Russian oligarchs. But the number of people who can afford to invest rather more modest (but still sizeable) amounts is expanding rapidly.

    Despite the recent upsurge, many Russians are either still unaware of investment opportunities in Bulgaria. Or perhaps they are simply wary of buying foreign real estate. Yet Russian property buyers in Bulgaria are usually very happy with their purchases and will recommend them to friends and colleagues. This is why it's a safe bet to assume that the Bulgarian market will become ever more popular in the future


    -anyway, yes the low 10% corporate tax will prove to very important i think for the economic growth of bulgaria. a stroke of genius almost, as is the low flat rate 10% income tax imo
    kas
     
    Last edited: Sep 30, 2008
  12. erikko

    erikko New Member

    I haven't consider Bulgaria as a potential market but seeing your posts make me think otherwise
     
  13. Jackie9

    Jackie9 New Member

    Hi Flyerman,

    quote ....." Looking at Bansko, for example, I believe if you can buy within a 300 (genuine google earth) metres from the entrance of the gondola at €700 / €900 per m2 then this could be an easy, and low risk, investment. In fact, anyone knows of any deals at these prices please contact me. Especially if the apartments have already been furnished."...

    What you are looking for: probably distressed sellers . There is nothing like this in Bansko , most are holding rather then selling in panic. There are such sales but not in large numbers. If you browse carefully the Internet and contact agents or developers for QUALITY units , t.e. clear mountain views , real facilities , top floors you'll see that choice is relatively limited.
    Additional hint: look for CONSTRUCTION QUALITY. You may also find Bansko properties advertised as "close to gondola" to be somewhere 2 km. from it.

    And finally DON'T buy around the golf course. DON'T! If you are for the golf - only buy inside! The biggest future scandal will erupt there. Know a couple of guys who bought cheap 2-beds 100 m. from the Ian Woosnam course - now trying to sell. No buyers!

    I personally bought in a quiet part of Bansko - not so close to the Gondola. It seems to me that the Gondola location is not the sunniest one.
     
  14. Flyerman

    Flyerman New Member

    As a skiier from the days of leather lace up boots, I will always forgo nice views and sunshine for proximity to lift. I'm skiing and it gets dark pretty early anyhow and i'm outside most of the day looking at great views from the top.

    I think facilities like swimming pools are good, but they have their downsides for owners - higher maintenance and sometimes not working outside season. They are great for non skiiers of course! Top floor is great too - but in 10 years time if the roof leaks its your problem. maybe this is why bulgarians themselves keep it simple - few facilities, not in eaves (not always a build space that's authorised for occupation anyhow).

    Everyone wants different things, thankfully. And for longer stays being close to town is a definite plus

    I rent out mine, and a few others in Bansko, Bansko Accommodation Blog, but so far every single new enquiry this year has been for close (genuine 300m) to the gondola. If you have children - then even more desireable to be close to lift.

    Interestingly, what has the biggest impact on visitors experience, is service. mmm maybe room for improvement here (although Kempinski. Bansko Royal Towers and Katarino have all been good for me)
     
  15. Jackie9

    Jackie9 New Member

    Hi Flyerman,
    Fully agree with you. For this type of a buyer I think 700-900 Eur. sq.m. 300 m. from the Gondola can be found. You can even squeeze some developers in the "Gramadeto" for their last units and get them at a bargain price. On the other side of the river you can get this as well. However, many buyers (who have mixed investment goals) go into the "families off-France" category? Have you heard about this ? These are the people who buy: "clear mountain views" , "higher floor" , "south facing" .......cheap (if possible).
     
  16. NeilHollingsworth

    NeilHollingsworth New Member

    How much do you think a 1 bed apartment in Bansko Inn should be valued at, completed and ready for use Nov this year? Stated as 100m from Gondola however i would say 300-400m is more realistic.
     
    Last edited: Oct 6, 2008
  17. Lysos

    Lysos New Member

    World stockmarkets are tanking, the pound is down @20% v. the euro (compared to last year); I don't think many people will be regarding Bulgarian property as a sound investment.
     
  18. Jackie9

    Jackie9 New Member

    Valuation of properties in a relatively new resorts like Bansko and to some extend Pamporovo (the new builds) is tricky. It may have some similarity with the UK , however the Bulgarian property market is just starting to mature.
    A lot of additional specific factors are playing role, sometimes significant role. In my opinion the "demand-supply" equation will soon establish realistic valuations.
    Look carefully in other established winter resort locations - the Alps (France , Italy , Austria ) , the US winter resorts.
    Once mass construction stops (it has been halted in Bansko) things will get clearer. In 2-3 years there will be an established market. At the moment location inside the resort and exclusive features (hopefully of interest for individual buyers) will be decisive for any valuation (sale).
    It's still to be seen how many people will act in the present credit crunch conditions. One must never forget that many "gold rush" UK and Irish buyers , who entered the Bulgarian property market went to Bulgaria driven by "I missed Spain but this time I'll jump on the train".
     
  19. Fletch

    Fletch New Member

    Having been in Bulgaria for 12 years my advise and always is dont buy without going to look first, everything might sound great but never buy blind. If you can find what you are looking for whether it is in the ski resorts or along the coast at the price you can afford, and mean afford not being able to afford it only with rentals, I would suggest that you look at the location and the area before you buy
     
  20. eurolink

    eurolink New Member

    I complectely agree

    I complectely agree with Fletch - it's very important to look at the location and to make your own research about the area , rental potential and everything else.
     
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