British buyers continue to dominate the market but interest in Black Sea resorts is fading
Many more nationalities are expected to invest in Bulgaria over the next few years since its accession to the EU. Now that Bulgaria is safely inside “The Club”, outsiders are more confident about pouring money into the country's real estate sector.
Currently, 29 percent of Bulgaria's real estate sales are made to foreigners, mainly British (67 percent) and Irish (12 percent). Other EU members have been less enthusiastic about entering the market, with Germans accounting for four percent of sales and Italians three percent. This year most foreign purchasers are still expected to be British.
Areas of particular interest to individual foreign investors are ski resorts such as Bansko, Pamporovo and Borovets. Black Sea resorts such as Albena, Golden Sands and Sunny Beach are seeing reduced demand because the area is only deemed lucrative in the summer. Negative press coverage of the perceived over-development of the coast may be another factor, although many resorts are still investing heavily in holiday complexes. Foreign firms are also continuing to pour money into upmarket developments such as luxury hotels and golf courses.
Katya Tsenova, Address Real Estate Agency's executive director, believes that another area of growth could be spa resorts such as Velingrad, Hisarya and Sandanski. Spa tourism is also the focus of the State Tourism Agency's current development campaign.
Last year, British real estate firm Assetz caused a stir by saying that Bulgaria was a less favourable investment location than the UK and that the time for fast profits in the country was over. Assetz recently issued a report, listing Bulgaria as the third best country in Europe in which to purchase buy-to-let property. While the UK was listed above Bulgaria, with Poland taking top spot, Bulgaria came above Turkey and France, traditionally strong buy-to-let locations. Estate agent Knight Frank lists Bulgaria in fifth place in Europe in house price growth for this year.
Colliers International has also announced that the industrial real estate sector received considerable attention last year, driven by logistics operators, manufacturers and traders. Bulgaria's pivotal position - on five of the Pan-European transport corridors highlighted for development by the European Commission - is just one element driving demand. Other factors include the rapidly improving economy, the boom in retail and production and Bulgaria's lower costs compared to the rest of the EU.
Atanas Garov, Colliers International executive director in Bulgaria, said he expected an increase of 220,000 square metres of logistics space this year, due to improvements in transport infrastructure, particularly in Sofia and Plovdiv.