Bulgaria’s real estate attracts investors
Real estate in Bulgaria is very affordable. Bulgaria has so much to offer that it is not surprising that it is rapidly becoming more popular as an alternative to traditional European real estate investment destinations. Some astute investors who bought in Bulgaria two years ago have seen their property values increase dramatically. But there is still a lot of potentials. The most important real estate transactions by the sea are at 120 euros per square meter, but real estate experts expect this figure to reach 400 euros per square meter by 2007.
At the beginning of the third millennium, in 2003, the average increase in real estate prices in Bulgaria was between 24% and 28%. The trend is expected to slow down and to maintain a moderate but steady rate of increase until 2007, when Bulgaria is expected to join the European Union.
Since 2010, the local real estate market has experienced an impressive revival, and several factors are contributing to this:
The opening up of mortgage lending – currently, mortgages account for 5% of the total credit supply within the local banking sector.
In developed credit markets, this rate is typically in the range of 15-20%.
There is also the increase in direct and indirect foreign investment in Bulgarian real estate, determined by :
The expected prospect of Bulgaria joining the euro
The expansion of the tourism industry;
Stable macroeconomic indicators:
Annual GDP growth of 4.5% to 5%;
The unemployment rate declined from 13% to less than 6%.
Credit rating improvement BBB.
Attractive investment rates of return in the real estate sector, averaging 7 to 10%.
The Black Sea coastal real estate market in Bulgaria has grown significantly since the beginning of 2003. The sales prices of new income residential properties have almost doubled in some areas compared to the year 2010. Seaside properties were on average 30% more expensive than those on the water. Bulgaria remains a popular vacation destination for low-income tourists, which explains the increased demand for smaller, less expensive properties.
The local market for residential properties in the major cities along the Black Sea coast has seen notable growth. Over the past year, demand has outstripped supply, partly because of the increased supply of mortgages and partly because of the continuing migration of the workforce from the interior to the seaside resorts and large coastal urban centers such as Varna and Bourgas, where more jobs are available.
Plots of land were also attractive for investment purposes. In 2019, their prices increased by more than 30% on average compared to 2015. Some seaside plots for the development of leisure properties reached 100 EUR/sqm, while similar properties were sold for 15 USD/sqm in 2002. In some areas close to the main resorts such as Albena, Golden Sands, Sunny Beach and others, prices have increased by more than double compared to the previous year and range between 70 and 100 EUR/m².
According to the NSI of Bulgaria, the quarterly growth rate of real estate prices is 12.5%. However, Sofia is the most expensive real estate market with an increase of 2.8%, followed by the cities of Varna (23.7%) and Bourgas (16.8%).
Real estate in Bulgaria is very cheap by Western European standards. Bulgaria has so much to offer that it is not surprising that it is rapidly becoming more popular as an alternative to traditional European real estate investment destinations.