Just a couple of months ago, Sofia Airport still featured large multi-coloured billboards, enticing the credulous and unsuspecting foreign visitor with advertisements of high-end holiday complexes, generously promising returns to the tune of 20 per cent, which seemed ludicrous. According to official statistics, holiday market yields in 2007 hovered in the five to seven per cent range, although pundits reported that returns on some developments had slid below three per cent.

Frustrated by talks of plummeting yields, hefty over-supply, poor construction quality, tightened lending conditions and temporary suspension of bank finance for vacation projects, consumers are devouring every think-tank's release on the future of this segment with almost pious devotion. The media are pursuing analysts and experts in a frenetic hope to elicit an emphatic black-or-white forecast about the next trend on the holiday real estate market.

When approached for comment by The Sofia Echo, Foros property company's general manager Dobromir Ganev smiled and said that, despite the indisputably low current returns on holiday properties, one could not equate all developments in terms of price, demand, quality and attractiveness. Foros researchers, for instance, do not regard Slunchev Bryag (Sunny Beach) as one area - they have found that the resort comprises four regions with different market performance, he said.

"It is impossible to simplify trends and figures for the sake of deriving a one-way tendency. Some holiday projects might and will be a success, others will not. It is quite individual. After a comprehensive cost/benefit analysis, we would rather advise an entrepreneur to give up on a project of a dubious profitability than venture into it, praying for good luck," Ganev said, noting that Foros had already recommended two developers to put on hold their investment plans.

A total of 976 672 sq m holiday properties were added to Bulgaria's Black Sea coast last year, 826 066 sq m of this at the southern seaside; the mountain-situated Bansko, Razlog and Dobrinishte gained as much as 345 000 sq m, according to Foros report for 2007. The figures are minuscule compared to the amount in the pipeline. About three million sq m vacation space is under construction along the coastline and 964 000 sq m in the prime mountain resorts. More than three million sq m are projected in summer destinations and about 660 000 sq m in the winter ones.

A survey, commissioned to Foros about two months ago, found that at the southern seaside alone (from Slunchev Bryag to Bulgaria's southern border with Turkey) there are about 22 000 to 23 000 unsold units.

Releasing a holiday development in this highly competitive environment has turned into a game of chance and persuasion, some brokers from RE/MAX agency admitted with a laugh. A good product is not enough. Real estate agents have to pursue clients, to court them, to offer additional services, such as maintenance and property management, to convey the impression that the customer will obtain something more than just an apartment.

"You cannot simply build a batch of apartments, launch it on the trading lot and expect that it will sell out, as it was before. Marketing expenditure has grown significantly and should be calculated in the cost of the product," Ganev said, re-iterating the generally admitted fact that presently, Bulgarian holiday sector is a buyers' market and entrepreneurs are coerced to obey the clients' requirements, which altered last year.

The profile of holiday real estate buyer changed in 2007 - the number of British and Irish customers, who were buying off-plan primarily with investment purposes, decreased, which was partly offset by the increased interest of Russians and Greeks. Unlike their predecessors, they preferred to venture into purchases of ready units for personal use. Russians tend to prefer seaside units, whereas Greeks are noted for their craze for Bansko, which could be explained by the virtual lack of mountain resorts in Greece. The number of Romanian customers, allured by real estate along the northern Black Sea coast, rose as well.

Another group, accounting for some 20 to 25 per cent of the holiday property purchases, took shape last year. These were Bulgarians working in resorts, looking for small apartments of up to 25 000 euro, located in less attractive areas. These transactions were usually financed through loans, Yana Vassileva from Foros' market analysis department told The Sofia Echo.

One of the interesting trends for 2007 was the emerging secondary holiday property market. This could be ascribed to a number of reasons, the first one being that units bought off-plan several years ago as an investment vehicle, were logically put up for sale. The other reason was that a large amount of properties were purchased on the developers' pledge of fetching high returns, which did not happen, and the owners opted for prompt disposal of the assets.

Despite the large supply, holiday property prices did not decline last year. Northern coast units appreciated by 18.8 per cent on average and southern seaside registered a 20.8 cent mark-up, according to Foros statistics. The highest increase, reaching 53.5 per cent was posted in Varna region, due to the small supply.

Resort prices in 2007 varied from 500 to 600 euro a sq m in sub-prime locations to 1500 to 2000 euro a sq m in attractive areas, such as on the beach-front, near a gondola station or a golf course.

Although the number of property transactions in 2008 is expected to decline due to the withdrawal of British and Irish customers and the logical downswing of the business cycle curve, one cannot speak of a crash of holiday real estate sector.

Foros' forecast did not much differ from the predictions of other analysts: a moderate growth for holiday market; widening differentiation; boosted demand for luxury large-area compounds, with a lot of space, allocated for green areas and a wide range of additional services offered; some developments will retain their price levels, others will appreciate and still others will lose value because of poor quality and lack of customers.

Sounds wise, but nothing clear-cut if you're looking for a detailed forecast.