Real estate in Bulgaria: a new look at the market

Bulgaria, being the poorest country in the European Union, is rich in real estate opportunities," said Richard Webber.

Up to 10,000 British citizens inhabit this Balkan country. Many of them bought homes during the boom of the early noughties, when real estate could be purchased at ridiculously low prices. Developers located on the country's Black Sea coast and in its new ski resorts spread widely, buying up every available acre of land to build a multitude of apartments. The country's sunny, cheap and picturesque resorts were considered potential sources of profit for speculative investors who dreamed of boosting their assets and earning high returns on vacation rentals.

The problem was that due to the enormous number of companies involved in the race and, in some cases, the absence of building regulations, the supply literally exceeded demand, and this happened even before the real estate bubble burst. Then, as in any developing market, problems arose, and some people got burned when developers went bankrupt. Then the2008 financial crisis seemed to be the requiem for the proud country's real estate, completely destroying demand from the British and leaving unfinished apartments throughout the territory. But interest in the country is growing again. Bulgaria is again in our top10 places to buy abroad in2019, which pleases Polina Stoykova, Executive Director of Bulgarian Properties, who believes that the country's real estate market has learned lessons from the financial crisis.

"Back then the market was very young, but now we can better predict the trends. We have realized that sustainable development comes through real estate investments for personal use or long-term investments, rather than speculative purchases for quick resale. Banks are much more conservative in mortgage lending, and now stricter construction limits are being applied, focusing in particular on building height and density. All of this will help Bulgaria avoid past mistakes."

In the years of the boom, the country was explored by the United Kingdom, and it seemed there was no village or ski resort without a British buyer, drawn by low prices and other advantages. Rural Bulgaria is a gateway to another world, where time has stopped, traditional Bulgarian life is carefully preserved, and beautiful landscapes remain untouched by large-scale construction. For those seeking a holiday home with a difference or contemplating a permanent move, inland Bulgaria is worth considering, especially with residential properties on the market for less than £10,000. Although sales in rural areas remain lower compared to the crazy years, villages surrounded by undeveloped land but close to the coast, towns, or cities are once again attracting the attention of British buyers.

One of these regions is Veliko Tarnovo and the small settlements surrounding this historic mountain city. The great medieval capital is a picturesque university town located on the edge of the winding Yantra River. History flows through its cobblestone streets and fortress walls. Its university is the second largest in the country and offers the opportunity for rental income to anyone who buys property in the city, where one-bedroom apartments start at 30,000 euros. Properties in good condition rented to students during the academic year can bring in up to 400 euros a month.

A local Bulgarian real estateagency in Veliko Tarnovo reports that a third of all inquiries come from the British. "Veliko Tarnovo has always been popular among British buyers, which is why it appeared in the television series A Place in the Sun in 2004," says Polina. "It's a very beautiful city, a cultural spot with stunning landscapes and many traditional villages nearby. It embodies the spirit and culture of Bulgaria. For urban properties, investments are stable. Rural houses are not really considered as investments, although there is potential to use them as family hotels. Most village houses are suitable for those looking to change their lifestyle."

However, the increase in rural tourism means that there are opportunities for earning for those who offer bed and breakfast to those exploring the green hills and valleys of Bulgaria. In villages like Elena, Balvan, Vetrintsi, and Musina, which are within 15 miles of the city, houses in need of renovation can be purchased for as little as 10,000 euros or even less. Renovated two- or three-room houses in good condition with a large garden can be found for around 30,000 euros. For those who want to live self-sufficiently, there is rich, fertile land stretching towards the magnificent mountains.

“Here you can enjoy a relaxed lifestyle, and even the fact that you are so far from the city doesn’t stop the villages from offering high-speed internet,” says Polina. “What many buyers appreciate is the social aspect. People in the villages, where Bulgarian traditions are preserved, communicate more and find time for their relatives and friends.”

Plovdiv: capital gains? A renewed interest from foreign buyers in villages is emerging not only in the north. Those within reach of Plovdiv, the second-largest city in the country, are back on the radar. Plovdiv, an ancient city nestled among seven hills, proudly declared itself the European Capital of Culture for 2019. This important Roman city still boasts many historical elements, including its cobblestone old town and one of the best amphitheaters in the world. The renowned medical university drives demand for apartments (one-bedroom from €60,000, two-bedroom from €80,000) from students, and buyers can expect rental yields of up to 10%.