According to the latest available data, Bulgaria is currently home to just over 7 million people. This figure is a slight fall on the total recorded in the previous census revealing, to some extent, the impact of migration on the country’s population. Economically, Bulgaria is in a stable position with a 3.5% growth in GDP reported in Q1 of 2017.
Credit rating agencies have taken note of this robust performance and, with further economic expansion forecast, both Fitch Ratings and S&P Global Ratings have recently upgraded their outlook on Bulgaria’s sovereign credit rating to ‘positive’. So what impact, if any, have these economic factors had on the Bulgarian property market and what opportunities can investors expect to encounter in this beautiful country which straggles the east and west?
The first point to note is that the restriction on foreign ownership of land in Bulgaria ended in 2012. The five-year moratorium on overseas ownership followed Bulgaria’s entry into the EU in 2007 and stipulated that, while non-Bulgarian companies were allowed to make purchases in the country, individual buyers were not. The expiry of this restraint made the market accessible to cash rich European investors, and Bulgaria rapidly emerged as a popular property investment location.
There are many factors contributing to the growing interest in the Bulgarian property market. The country has undertaken huge infrastructure improvements over recent years, including the construction of new roads linking all major destinations. In addition, world class airports now serve the capital Sofia along with the southern city of Plovdiv and the Black Sea coastal city of Burgas. These developments mean that Bulgaria is now easily accessible from all major European departure points, placing it on a par with the more established continental destinations.
This has led to a significant spike in tourist numbers, with a reported 8 million holiday makers visiting the country last year, making tourism a major contributor to GDP. Consequently, there is increasing interest in the holiday homes market in Bulgaria’s popular sea and ski resorts such as Sunny Beach and Pamporovo. While over 50% of buyers are Bulgarian, foreign interest is growing, with favourable exchange rates attracting buyers from numerous European countries. This year has also seen an influx of investment from Russia and this trend is expected to continue.
Although prices have been largely stable since the economic crisis, growing demand and increasing sales volumes have begun to drive prices upwards in line with the nationwide market, where the house price index rose by around 7% (year on year) towards the end of 2016. The average price for a home in Bulgaria now stands at €90,000, leading to the country recently being named the best value location to buy an overseas property, ahead of Turkey and Greece.
To help prospective buyers, a government website (property-in-bulgaria.bg) provides general information and guidance to foreign nationals in the process of acquiring property in Bulgaria. The website also explains the legal rights of foreign property owners to remain in the country, along with a guide to property taxes and the fees involved.
Property development in Bulgaria is well below peak (another factor contributing to the upward trend in prices) but it is by no means absent. One notable example is the Poseidon Complex in the Black Sea coastal town of Nessebar. Poseidon consists of six apartment buildings, in elegant surroundings, which also offers excellent facilities including a swimming pool, a children’s playground, a tennis court and a spa.
Overall, Bulgaria has a lot to offer for everyone, whether you are looking for a second home in one of the major cities, a holiday home in a popular resort or somewhere more rural and remote. In addition, rising rental yields offer an attractive incentive for investors searching for new opportunities in the European buy-to-let market. Together, this combination makes Bulgaria one of the most enticing markets of the moment, and now would appear to be a perfect time to get onboard.