Bulgaria’s Property Market Starting to Cool

Summary: Bulgaria's property market is starting to cool and slow down

If you’re considering buying property in Bulgaria to take in the seaside resort lifestyle or even the skiing action found high in the Pirin mountains, you’re in good company among many other Brits who have already done so.  If it is your desire to enjoy the double-digit, fast-paced property price growth your fellow Brits have experienced, you might be a little too late however.  It appears as if the days of a quick turnaround at high profits are waning in this formerly on fire property investment hotspot.

In this article we’ll take a look at what is happening with the Bulgarian property market and the fact that Bulgaria’s property market is starting to cool.  However, although the country’s market is in a cooling cycle, it does still offer potential for investors – just not as much as it did a few years ago prior to EU accession.

The Oxford Business Group has issued its findings about the Bulgarian property market.  Whilst the news isn’t really dreadful, it is signaling a slowdown in the incredible appreciation rates of the past.  According to the group, the days of 25% per annum increases in value are likely over.  Although the property market is maturing and cooling however, the group does note that the cooling hasn’t brought yield below 10% as of yet.

As the market enters a maturation phase, the Oxford Group has noticed that planned developments have been put on hold in some areas and scaled down in others.  The group does not see Bulgaria’s market coming to a screeching halt any time soon, instead it envisions the future development of new suburbs with European-style shopping plazas, Big-Box stores, developed nightlife potential and more.

The group is anticipating investors will need to brace for a further downturn in growth in the near future.  The double-digits are likely to go away at least in the short term.

Investors interested in the market might soon find themselves taking the buy-and-hold approach buyers in Spain are using.  Or, they might look more closely at buy-to-let in the tourist regions.  On the positive side of things, if you’re looking at taking one of these approaches, tourism within Bulgaria continues to climb in popularity.  The World Travel & Tourism Council is estimating a 4.7% per annum growth rate through the year 2017.

Another interesting observation by the Oxford Group is that Black Sea area resorts are starting to lose their luster among buy-to-let investors.  They are now turning their attention to the year-round opportunities the Pirin area provides.

Whilst cooling is anticipated to continue for some time, the group does note that interest here is still rather high among foreign investors.  Total 2006 sales figures show that 29% of property in Bulgaria that was sold was purchased by foreigners; of that percentage 67% of foreign buyers were British and another 12% were Irish.

Maturation of the Bulgarian property market isn’t good news for investors looking for quick turnaround at high profits.  It is however, not the worst news in the world for buyers of holiday homes and those who would like to cater to the growing holiday trade.  If buying Bulgarian real estate is of interest, just look before you leap.

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