by Stanislava Ciurinskiene

Property prices will continue to grow in the year ahead

“Will theBulgarian property bubble burst?" was the question of 2007. Experts had predicted a fall and investors were concerned. Other commentators argued that Bulgaria's entry into the EU would give a new push to property prices, although they would not rise as fast as during the last three years. The optimists were proved right and prices continued to rise by 30-35 percent in 2007. But the 2007 question still remains. What will happen to the bubble, and is there a bubble at all? In 2007, Eastern European real estate witnessed the unthinkable: prices for properties in Latvia and Estonia collapsed by 10-15 percent within just three months. That happened after prices in the Baltic States had increased by 300 percent over five years. As Latvian and Estonian economies were two of the strongest among the new EU member states, this collapse came as a shock. Analysts reported that Europe has already begun experiencing the impact of the credit crisis in the United States. What will happen to Bulgaria's property market in the year ahead, in the context of what looks like a global real estate crisis? We are going to experience deeper divisions in the market, and in most areas prices will continue to rise, while in others they will remain stable.

2007 brought new developments to the residential sector. Previously, attractive investment spots were Sofia, Varna, Burgas and Plovdiv. Investors are now turning their attention to underdeveloped areas of Blagoevgrad, Veliko Tarnovo and cities along the Danube, such as Ruse and Vidin. At the moment, prices in these towns range from 300 to 850 euros per square metre, with expectations that they will rise by 25-30 percent in 2008. Nevertheless, the main residential market remains in the capital. In Sofia and the larger towns, 2008 is going to be the year of so-called gated communities with their enhanced infrastructure and facilities such as a gym or tennis courts.

In 2007, prices in Sofia rose by 35 percent and costs varied from 850 to 2,500 euros per square metre. In the New Year, deeper segmentation will divide the capital's residential property market in half due to a shortage of high quality apartments in a good location. Gated communities will jump by at least 20-25 percent, whereas a lower quality apartment in a district without good transport links will increase by no more then 15-20 percent. The hottest investment spots will remain the districts of Lozenets, Buxton, Ivan Vazov, the Doctors' Garden and Iztok. A special case in 2008 is going to be the “city within the city” – Mladost I, II, III and IV. Although Mladost is not the most prestigious district, and apartments are generally of poorer quality, it is still anticipated that prices will go up by at least 25 percent due to the construction of a new underground line. Prices are currently about 1,000 euros per square metre.


Bulgaria adopted Natura 2000, the EU network of protected wildlife sites in 2007. After a struggle between the government and ecological groups, 34 percent of land will be protected. This will lead to a price rise for land outside the protected areas. Until October 2007, it was estimated that in 2008 the number of deals involving agricultural land would reduce by 500 percent due to a planned tax rise for changing the purpose of the land. Investors usually buy agricultural land aiming to change its purpose and to do that they pay three euros per square metre. As taxes will now remain the same, agricultural land will be the hit of 2008, especially near the sea, rivers and in the mountains. Land near motorways, both operational and in the planning phase, as well as land in strategic locations (for example, near state borders), will be equally attractive.

Once again, land will be the most expensive in Sofia. Prices for land varied from 50 to 3,000 euros per square metre in 2007 depending on the purpose and the location. Surprisingly, in districts like Mladost and Darventiza – not among the most desirable areas – prices jumped by a remarkable 140 percent from March to November 2007 and this tendency will continue. This applies to all regions with a shortage of land for building purposes such as Buxton and Lozenets. There is a dramatic shortage of plots suitable for administrative, trade and retail development in larger cities. This is why prices in these segments may increase by even 50 percent over the next 12 months.

Holiday homes

Facing increasing competition from Croatia, Montenegro, Greece, Turkey and Cyprus, as well as the problem of over development in certain resorts, the price rises for holiday homes on the Black Sea coast may slow down slightly. Prices for high quality apartments and villas near the sea (known as first line and second line) are going to rise by no more then 20-25 percent. Prices for holiday homes of lower quality are going to slow down to 10-15 percent and some will even remain the same. This also applies to winter resorts. However, it depends how near the property is to a ski slope. For both winter and summer resorts, any price within 1,300-2,000 euros per square metre was considered reasonable in 2007.

Rural properties

The days when gullible foreigners bought houses “with a lot of potential” in small villages, without a clear vision of the purpose of their investment, are officially over. The only source of investment return from Bulgarian rural properties could be rural tourism. However, for a number of reasons, rural tourism is still not popular in Bulgaria, and nobody can tell for certain if it ever will be. During the last 15 years, many Bulgarians have been leaving their villages for the cities or even abroad.

Business properties

Class A offices are expected to be one of the most profitable investment sectors everywhere in the country, especially in Sofia and larger cities. In 2007, both local and Bulgaria-based companies finally left the small apartments some called “offices” and moved to large, luxurious and comfortable premises. That has led to a serious shortage of class A offices, despite the intensive development of administrative buildings and entire business parks. A new trend that will continue in 2008 is the relocation of business areas from the city centres to the outskirts of the larger cities and Sofia. In 2007, Sofia was ranked fourth in Europe for investment return from office buildings at 7.5 percent. For the first time in Bulgaria, last year's office prices reached higher levels than those for residential properties, and varied from 700-800 euros per square metre in smaller cities to 3,000 euros in Sofia.

Predictions are that a specific sub-segment of business properties, such as shopping malls, will be the investment return champion of 2008. It is almost impossible to rent space in a retail area for less then 25-30 euros per square metre and prices are expected to rise by up to 40 percent. Prices for retail premises are similar to those for offices and are to increase at the same pace.

The Bulgarian property market has begun its transition from a speculative investment haven to a profitable, but more conservative market. The real question over the next five years is not going to be where prices will rise fastest, but where the best potential is.

In 2008, the most promising sectors are residential and business properties.


    Commenting on

    Vagabond Media Ltd requires you to submit a valid email to comment on to secure that you are not a bot or a spammer. Learn more on how the company manages your personal information on our Privacy Policy. By filling the comment form you declare that you will not use for the purpose of violating the laws of the Republic of Bulgaria. When commenting on please observe some simple rules. You must avoid sexually explicit language and racist, vulgar, religiously intolerant or obscene comments aiming to insult Vagabond Media Ltd, other companies, countries, nationalities, confessions or authors of postings and/or other comments. Do not post spam. Write in English. Unsolicited commercial messages, obscene postings and personal attacks will be removed without notice. The comments will be moderated and may take some time to appear on

Add new comment

The content of this field is kept private and will not be shown publicly.

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.

Discover More

Six months after the Covid-19 pandemic forced the world into lockdowns and uncertainties, a fuller picture of its effect on the world economy is beginning to emerge. Bulgaria fared not too bad, according to recent statistical data.

Nowhere is the abyss between what Boyko Borisov's GERB says it is doing and what it in fact does so obvious than in the economy of what firmly remains the EU's poorest state.

From bad to worse? According to a poll by Alpha Research published at the end of 2011, the majority of Bulgarians consider 2011 to have been "the worst" since the economic collapse of 1997.

In the third quarter of 2010 the average monthly income of an adult member of a family in Bulgaria decreased by 2.2 percent on a year earlier. At the moment it is 932 leva, or 466 euros, according to the National Statistical Institute.

The crisis was already a fact in Bulgaria at the beginning of 2009, but the owner of an accountancy firm in Gorna Oryahovitsa would deny it even more vehemently than then Prime Minister Sergey Stanishev.
Rays of hope have started to peep through the cloud-covered economic horizon – even in the new EU member states. Poland has managed to avoid going into recession.

At first, they stopped buying. Then it got worse - they started selling. Yes, it seems the British have deserted the Bulgarian property market and the Bulgarians are taking it very personally.
"The Bulgarian economy is stable." The words former Finance Minister Plamen Oresharski uttered in October 2008 seem more than just a little out of place a year later.

While last autumn the prevailing opinion of people in this country was that the economic crisis did not have a direct effect on them, their view is now completely different.

The commercial real estate market in Bulgaria is at a crossroads.
The "monster munch," as Londoners call the current credit crunch, in my view is running out steam. Everyone is growing tired of the pundits.
According to a saying very popular among Bulgarians in the past, "In his life, a man must do three things: raise a child, plant a tree and build a house for his family." Nowadays this way of thinking no longer reflects the urban lifestyle – the current rati