Bulgarian beach property sales up by 30pc

Photo credit: Jess Judge

Sales of beach property in Bulgaria have increased by 30 per cent, according to new figures, as the country's real estate market recovers.

Indeed, according to Bulgarian Properties, for the first time in four years the data coming from the Bulgarian property market is predominantly positive, as prices stabilise and foreign demand increases. Deals with rural houses also rose by 40 per cent in the third quarter compared to 2011 making them the best-selling property on the market in the past few months.

But for many overseas buyers, the beach is where it's at.

"This segment of the market has started to recover driven by interest from Russian buyers to purchase their own holiday apartment in a warm and sunny place like Bulgaria," explains Bulgarian Property. "The number of apartments sold in the third quarter increased by about 30% year-on-year, while the interest was focused mainly along the Southern Black Sea Coast, not only in Sunny Beach but also in Pomorie, and also in Ahtopol, Sozopol, Lozenets and other resorts."

"Winter resorts are not yet able to fully experience the excitement that is ongoing at the sea," adds Head of Research Polina Stoykova, "as Russian buyers prefer much more beach properties to ski properties. However, there is a trend of increased interest to the ski resorts, which now offer more attractive prices."

Indeed, Bansko is now the cheapest holiday market in Europe, according to Stoykova, with prices hitting as low as 300 euros per square metre.  The result is a positive forecast for the winter property season.

"Our expectations for active 3Q for beach resorts have come true and the dynamics in this segment even exceeded our forecasts," comments Stoykova. "The first data from October shows retaining of dynamics and it seems that 2012 will end with market optimism for the vacation markets and an increased popularity of Bulgaria among Russian buyers."

Rural houses have also performed well, particular in areas around Burgas, which accounted for about one third of the total number of rural houses sold in the three months to September 2012.

But Sofia remains the main problem area, with transactions remaining at the same number as last year. The properties that are selling are at the lower end of the market, as investors remain cautious in an uncertain financial climate.

"Sofia seems to be falling behind in terms of market optimism, as this market is driven mainly by Bulgarian buyers," comments Stoykova. "Bulgarian buyers are still concerned with the crisis and the uncertainty in their incomes. This concern can also be seen from the Bulgarian National Bank's data regarding the number of newly granted mortgages - their volume in 2012 continues declining, even though that Bulgarian banks are now offering the lowest mortgage interest rates since the beginnig of the crisis."

The average price of Sofia apartments sold was 710 euros per square metre in the third quarter, down from the previous three months. Across the first nine months of the year, the average sale price for flats in was 720 euros per square metre, significantly lower than the average listing price of 895 euros per square metre. Both are the lowest since 2006, and the gap between listing prices and transaction prices continues.

"Our forecast from early 2012 for retention or minimal decrease in property prices have justified. We have not seen big changes on the Bulgarian property market this year. The price decreases are gradually fading away and we have seen some first signs of recovery," concludes Stoykova.

"Adequate pricing of properties based on their characteristics will continue to be leading for the successful and fast sale, and buyers will continue searching for quality properties at bargain prices in 2013."