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Property price rises slowed in Bulgaria in 2006, after the rapid price rises of earlier years. Property prices countrywide rose 16% in 2006, according to the National Statistical Office, and 9.7% in Sofia. This followed price rises of 37% nationwide in 2005, and 20% in Sofia.
In previous years, the Black Sea boom spurred an enormous amount of new development. There were 1.5m foreign visitors to its Black Sea resorts alone last year, and Bulgaria is now the third most popular holiday destination after Spain and France for British holidaymakers. However price rises on the coast appear to have tapered off, as the developer horror stories have sunk in. Strong rises continue in inland areas of picturesque interest, such as Lovech (up 40% in 2006), one of the oldest and most interesting Bulgarian towns, with its cobbled streets and Renaissance houses; or the ski town of Smolyan (50% up in 2006), as well as Vratsa (39% up in 2006), from which came the Harry Potter Quiddich Vratsa Vultures.
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The largest group of foreign buyers is the British. There are 30,000 British home-owners in Bulgaria. In the medieval city of Veliko Tarnovo, perched on three hills above the Yantra river in central Bulgaria, there used to be only two estate agents. In the last two years, however, at least 80 new ones have opened their doors to a wave of British buyers looking for a slice of the Bulgarian housing market. One in seven UK investors thinking of buying a property abroad say they would consider either Bulgaria or Romania, according to research by MRI Overseas Property.
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In addition, many Bulgarians are profiting from the real estate ‘gold rush’, so there is a certain speculative element. Indeed, real estate has become something of a national obsession. Sofia itself is experiencing a rush of prosperity, though at the same time, many areas of Bulgaria remain desperately poor, one consequence being a population decline in almost all cities except Sofia. Sofia’s first three malls opened in 2006, and Bulgaria Mall will open in the next few months. There are plans for 10 additional malls by 2010.
Upsurge in demand
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The house price rises over the past few years have been met by a sharp rise in residential construction. Supply began to meet demand in the second-half of 2005, and the stabilization of house prices is one result, with more gradual increases in prices for new construction and slight decrease for old prefabricated panel buildings. The supply in the rental market has gradually increased throughout 2005 and 2006, particularly high-end properties in middle-class areas of Sofia.
In Sofia, most of the new supply of high-class apartments in the rental market is located in Doctor’s Garden, Lozenetz, Iztok, Ivan Vazov and Hladilnika. Most supply comprises one and two-bedroom apartments.
Ivan Vazov, Lozenets
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Sofia’s Ivan Vazov district now leads in property prices, according to imoti.net., outrunning former leaders like Iztok district and the central parts of the capital. Most property offered in Ivan Vazov district is luxurious two and three-bedroom apartments. Proximity to central Sofia and good infrastructure, including medical and education centres, were the factors that produced this development, according to real estate agents.
Lozenets, previously the holder of the title as the district of most expensive property in the capital, now ranks second. Excessive construction in this district has produced various problems for property owners in the neighborhood. Among these are the lack of parking spaces, difficult transportation and proximity of buildings.
Although experts believe that the supply of residential properties in Bulgaria has already outrun demand, now that Bulgaria is in the EU its future is even brighter.
