A place in the sun
 The former communist country of Bulgaria has come in from the cold and is emerging as a property hot spot for bargain hunters
Published in Square Foot Magazine on July 15 2006
Everybody talks about Bulgaria as a new hot spot for property investment. The country's residential property market is showing consistent price increases, with some popular areas seeing a rise of up to 49 per cent over the past 12 months. There has been a flurry of building activity in Black Sea coastal resorts such as Varna, Sunny Beach and Nessebar; there is also new-build and resale activity in ski resorts like Borovets and Bansko; and renovation properties are in demand in the rural hinterland, such as in the historic town of Veliko Turnovo.
Why
- Sun lovers will enjoy regular Mediterranean temperatures of 26 degrees Celsius on the Black Sea coast, which plays host to more than 1,700 hours of sunshine between May and October. The area has a variety of modern resorts, 220km of sandy beaches and beautiful clean water
- During winter, the conditions are ideal for skiing and snowboarding. A huge investment has been made in ski resorts such as Bansko, Borovets, Pamporovo and Vitosha
- The economy has been increasing at a sustainable rate of between 4 per cent and 6 per cent per year due to tough government reforms and the national currency being pegged to the Euro
- Bulgaria is due to join the European Union next year, while property prices are expected to keep rising in anticipation of low-cost flights and increased foreign investment
- Bulgaria is a candidate for the 2014 Winter Olympics
How
- A foreigner is not permitted to own land in Bulgaria, so you'll have to form a limited company and register yourself as a company director. This takes about four weeks and costs £600 (HK$8,570)
- Get a solicitor to draw up a preliminary contract of sale, at which stage the buyer must lodge a 10 per cent deposit
- The most important part of the transaction is the signing of the Notary Act, which can be done in Bulgaria after you have inspected your property
- Pay the purchase-price balance, land tax and notary fees (totalling about 5 per cent of the purchase price)
- The buyer and seller usually split the estate agent's fees equally (about 5 per cent of the purchase price)
Anything else?
The property market is being driven by local demand as mortgages become more readily available and wages rise. Investment rationale relies on capital growth and, in the right places, rental returns; either letting "en bloc" to big tour operators on the Black Sea coast or as long-term lets to affluent locals or expatriates in the capital, Sofia. Prices are expected to rise by a minimum of 15 per cent year-on-year, but in some places this figure could hit 40 per cent.
Be careful, there are many unscrupulous agents inflating prices for sales to non-Bulgarians. The hot spots are also in danger of oversupply as off-plan developments spring up on every spare corner. You will also need to carefully check the building quality of off-plan developers. And last, but not least, Bulgarians nod their head for "no" and shake it for "yes", which can be very confusing!
Who
PROPERTY AGENTS
The Right Move Abroad
+ 359 2987 8762; www.therightmoveabroad.com
Bulgarian Dreams
+ 44 20 7614 1240; www.bulgariandreams.com
Experiencebg
+ 44 20 7903 5065; www.experiencebg.co.uk
LEGAL ADVICE
Delchev, Simeonov & Partners
www.dsp-lawfirm.com
New Balkans Law Office
www.newbalkanslawoffice.com |
