The Bulgarian Property Investment Market

Past, Present & Future

The growth of the Bulgarian property and tourism markets began to take off after the fall of communism, although Bulgaria's Black Sea coastal region has long been a summer touristic destination for the Eastern-Block countries. The transition from communism to a functioning market economy took around 10 years, during which time the accessibility into and around the country was limited and the standards of accommodation were inferior.

In 2004 Bulgaria was admitted to NATO and followed with admission to the EU in 2007, yet the local currency has long been tied to the Euro, which has allowed for low interest rates. Admission to the EU increased the amount of direct and in-direct foreign investment, especially with the removal of various restrictions aimed at foreign investment in land and real estate.

Reconstruction of hotels and buildings began and local unemployment levels fell, and average monthly incomes began to rise. This was coupled with the growth in the potential of mortgage lending in the past couple of years. Growth of employment levels has especially been seen in the tourism sector, which is now one of the fastest growing areas in the country.

At present, approximately 90% of property in Bulgaria is owner-occupied, leaving a high demand for rental properties. This has been an area of interest to overseas buyers as there is an established demand in the growing market. The early stages of the Bulgarian property market make now an ideal time to invest, especially coupled with the low associated buying costs in comparison to other European markets, and being able to purchase a property free-hold.

Tourist numbers in Bulgaria are growing year on year, and presently one of the highest priorities of the Ministry of Trade and Tourism is the upgrading of tourism infrastructure. Encouragement is aimed at both the public and private sectors towards residential construction and tourist accommodation.

The Bulgarian real estate market is set to continue growing for some time, with the next few years predicting a boom of Bulgarian nationals entering into the property market. This is due to the recently acquired purchasing power and the expansion of the mortgage lending market, leading to an expected high increase in the demand for quality housing.

Bulgaria provides a location with excellent returns on capital as the property prices are steadily rising and expected to continue to do so for some time. Due to the favourable factors of the Bulgarians investment market for national and foreign buyers, Bulgaria is widely considered to be one of the most rapidly advancing real estate locations in Europe.

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