On 20 May 2005 ‘The Times’ wrote that last year Bulgarian property prices rose by about 35 per cent, and in the lead-up to EU accession in 2007 annual rises of 25 per cent are predicted.
The most popular investment now, and probably until Bulgaria enters the European Union in 2007, is 1 and 2 bedroom apartments, purchased off-plan, in strategic winter and summer resort areas.
The phenomenal interest in Bulgarian property shown by shrewd buyers during the last two years has been compounded by a sudden surge in golf course development. The millions of Euros being invested by large international corporations in these ventures will probably feed this buying frenzy.
Golf grabs Bulgaria!
At the present time there are only three golf courses in the whole of Bulgaria: one at Elin Pelin, near the capital, Sofia, and two owned by Air Sofia. These are located at Ihtiman, opened in 2000, 40km from Sofia, and at Sliven, opened in 2004, 90km from the Black Sea.
Because of the increasingly rapid rise in foreign interest in Bulgaria recently, several more golf courses are proposed. One of these will be located at Razgrad, in the north-east, about 90km from the Black Sea. More are scheduled to open in the next few years: two at Kavarna and one at Primorsko, near Sozopol.
Mountain and ski areas will be represented by a golf course in the ski town of Bansko this year, and a very large golf complex between Kostenets and Borovets, the country’s foremost ski resort. This is scheduled for 2007, the year of Bulgaria’s entry into the European Union, and will be located at Dolna Banya, already near Bulgaria’s first golf course at Ihtiman.
Bulgaria Properties Ltd has purchased almost 6 acres of prime development land adjacent to the proposed golf course at Dolna Banya. The plans are to construct about 220 apartments around a comprehensive sports complex, with access to the golf course by a short footpath. The amenities on site are to include tennis, volleyball, squash, badminton, lawn bowls, boules (boccia), shooting, archery, croquet, mountain biking, and fishing nearby. Indoor facilities will include a 140-seat main restaurant and cabaret stage, a huge main bar (perhaps the largest in Bulgaria), a sports bar with projection TV, snooker, pool, table football, table tennis, a Chinese restaurant, Indian restaurant, fast food cafeteria, pizzeria, gymnasium, sauna, massage parlour, clinic, chemist, sports shop and minimarket.
Steve Avery, a Director of Bulgaria Properties Ltd, said, “It may sound like a cliche, but we really were in the right place at the right time! After two years in this business, I just couldn’t believe my luck to find such a gem. Anyone involved in this project should make a serious return on their investment.”
General observations about the Bulgarian property market.
On Borovets and Bansko generally, Steve had this to say: “Apart from having ski lifts and ski runs, these two towns are quite different from each other, and appeal to different groups of people. Bansko is an old, traditional residential town with lots of character and no fewer than 180 quaint taverns full of local people singing and dancing to a typical Bulgarian folk band. Borovets, by contrast, is purely a resort, with hotels, modern west European-style bars and night-clubs, cafes and restaurants. Residential property and holiday homes are therefore readily available in Bansko, but not in Borovets, where the closest you can get is usually in one of the surrounding villages.
“As for property values, Bansko went mad for a period of three months at the end of 2003, with land prices doubling, and then calmed down. Many poor goatherders suddenly found that they were rich. Nothing wrong with that, I say. Since then values have been pretty steady there until now, when they’re starting to creep up again. The reason for this is that the sudden surge in foreign tourists to Bansko has left the supply of holiday accommodation woefully short of the demand. And this trend shows no sign of abating. To try to cope with it, there have sprung up many hotels and apartment projects, but it seems unlikely that even these will be able to satisfy the demand for accommodation for several years yet. As a result, the prices for such apartments range from 1,000 Euros per sq.m. for a ground-floor unit facing away from the mountains, to 1,350 Euros per sq.m. for a top-floor example with a mountain view. Yet, people buy them. I guess, because a 1 bedroom 60sq.m. apartment for £41,000 is still a far better deal than you’d get in Spain. I’ve heard developers claim that 90% of their apartments are sold within 3 weeks! I only hope that we have such luck when ours are released in June!
“In this respect Borovets, again, is different. Although it’s Bulgaria’s first and best-known ski resort, it stagnated for years…until now. The ‘Super Borovets’ project, funded by EU, governmental, foreign and local business sources, is scheduled to run from 2005 to 2009, and will revitalise the whole region around the town to a radius of 10-12km. This has already started to affect property values in the surrounding areas. To give an example, in March 2004 we bought, unseen, a half-acre plot in a village 15km from Borovets. When I visited it, I discovered that it wasn’t suitable for building apartments; so, I put it on the market in August. By November it was sold at an 80% profit - after all costs were deducted!
“I am personally of the opinion that the ‘Bansko effect’ could strike around Borovets at any moment. That’s the reason why Bulgaria Properties Ltd is developing four projects here, and only two in Bansko. We can sell these apartments about 25% cheaper - at the moment, anyway. Borovets must surely offer a better return on investment, regardless of the type of property bought: land, a shack, whatever. You won’t find new apartments easily, though. As far as we know, Bulgaria Properties Ltd is the only developer building them. I don’t, however, expect this monopoly to last for long.
“Bulgaria’s third ski region is at Pamporovo, which, like Borovets, is purely a resort. Funding is starting to come in, but full development, if it happens at all, is likely to follow several years behind Borovets. Its distance from Sofia (a day’s drive) makes it less attractive to visitors from north and west Europe. It is, however, popular with Greeks, because of its proximity to the frontier. One of Bulgaria’s major motorway routes to Greece will pass very close to Pamporovo, and this should boost its popularity, as well as making the Mediterranean Sea more accessible.
“Property values are lower here than in Bansko and Borovets, but are creeping up gradually. I reckon that Pamporovo is a good long-term prospect; say five to ten years. The only reason why Bulgaria Properties Ltd has no developments here is because I’ll probably have retired before the boom happens.”
