After a long housing-market slump triggered by the global real estate crisis, when prices dropped on average about 30 percent below their 2008 highs, Bulgaria is seeing housing prices rise this year for the first time, brokers said. About 10 percent of the Bulgarian housing market is made up of foreign buyers, said Stanislav Petrov, the sales manager for Select Properties Bulgaria, an agency with offices in Bulgaria and Great Britain. Foreign buyers, most of whom are seeking vacation apartments or houses, tend to be attracted to the Black Sea coast, in particular the cities of Varna and Burgas, followed by ski resorts, such as Pamporovo and Borovets. “The capital, Sofia, is the third preferred region or area for foreign buyers,” Mr. Petrov said, “with higher-priced properties than the Black Sea coast and the skiing resorts.” The average price of homes in Sofia in the second quarter of 2014 was 753 euros, or about $992, per square meter, or about $92 a square foot. In Varna, the average price is 699 euros, or about $920, per square meter, or roughly $85 a square foot.
WHO BUYS IN BULGARIA British buyers, who helped fuel the home price bubble in Bulgaria from 2000 to 2008, largely disappeared after 2008 and were replaced by Russians. However, this year, British buyers have been returning to the Bulgarian market in growing numbers. Russians continue to be the largest group of foreign homebuyers in Bulgaria, and are joined by buyers from Germany, France, Holland, Belgium, Ukraine, Scandinavia, the United States, Canada, Australia and South Africa, brokers said. In the last two years, Bulgaria has also seen growing interest from buyers in the Middle East, Mr. Petrov said.
Foreigners are not restricted when buying apartments in Bulgaria, but homes with land pose a bit of an obstacle. While buyers from the European Union countries have no restrictions, other foreigners who wish to buy a home with land must form a company, brokers said. The process is fairly fast, easy and cheap, and can be handled by real estate agencies, brokers said. “The Bulgarian government a year ago made the process of setting up a limited company easier and cheaper,” Mr. Petrov said. “They do the process electronically, and all documents can be applied for online now.” The cost of setting up a company is typically about 200 to 500 euros, or about $265 to $660, and takes less than a week. For agency assistance, which usually includes legal assistance, buyers typically pay about 3 percent commission. Notary fees, stamp duty and municipal local tax typically cost about 4 to 6 percent of the property price. In total, additional costs are about 8 to 9 percent of the price of the property. Many home sellers in Bulgaria offer buyers the opportunity to pay in installments, Mr. Petrov said. Most buyers pay in cash, though mortgages are available, he said.
By Alison Gregor • Aug. 27, 2014