The Bulgarian southern Black Sea coast was the big winner this year when it came to the prices of holiday villages. This was one of the conclusions that could be drawn from a market watch report from real estate company Green Life Property Development (GLPD). The report was published on September 4.
According to the company, owners of apartments in residential complexes or holiday villages in Sozopol have received an income of five to seven per cent from renting out their property this summer.
In general, the prices of these estates have increased by 18 per cent over the course of the year. This, according to the report, contradicted reports that foreign buyers had started to withdraw from the Bulgarian real estate market. On the contrary, GLPD said that buyers had made money from their properties and there was no tension on the market. However, the GLPD report specified that this applied mostly to luxury residential and holiday complexes that had a good location, close to the coastline, and had a good infrastructure.
According to Nikolai Pehlivanov, GLPD executive director, at the moment at Sozopol there were close to 20 residential and holiday complexes, that were under construction. Only four of them, however, fitted the description above and that was why many of the apartments had remained unsold. There was still a real need for complexes that met the above criteria. This showed that, despite the almost daily releases about new residential complexes being build, there was a serious need for the right kind of developments, those in the segment of the market that actually attracted buyers.
“It was not because the clients have lost interest in this kind of property. It was simply because the concept of most of the complexes was wrong,” Pehlivanov said.
GLPD cited a new trend in the market. Up until a year ago, 80 per cent of the buyers along the Black Sea coast were English speaking, today the situation had changed. UK citizens accounted for just 20 per cent of the real estate deals, according to GLPD data, while the new buyers came from countries such as the Russian Federation, the Baltic states, Romania, and surprisingly Belarus and Kazakhstan. New buyers, according to GLPD, meant new demands and new criteria, which if some investors did not manage to adapt to quickly enough would mean they lost their market positions. “This was probably the main reason why we have received so much negative information about the market lately,” Pehlivanov said.
“If the motto of most UK buyers was ‘buy it as cheap as you can’, the motto of most Russians was ‘buy it with as many luxury additions as you can’”, Pehlivanov said. What Russian clients were most interested in were spacious apartments with separate bedrooms and big living rooms. “They intended on having their property close to the sea as possible,” he said. Russian customers had high social status in their home country, and simply wanted to maintain it abroad without arguing much about the price. “This behaviour is something of a chain reaction and it is difficult to say how long it would to continue,” Pehlivanov said.
At the end of the summer, GLPD described the profile of people who wanted to rent an apartment . “This segment was nothing new to Westerners, but the new trend this year was the Bulgarians, the Polish and the Czechs.”
Winter resorts were another subject. “In the past few months there was an evident slowdown in this segment but I expect things to change in October, with prices 10 per cent higher than the current ones,” Pehlivanov said. So, if someone wanted to buy a real estate property in Bansko, for example now, would be the appropriate time. According to Pehlivanov, close to 50 per cent of the deals in the segment were done on line, with 40 per cent of the buyers looking for additional income. The profit from these deals was expected to be maintained at the same level as last year, seven per cent, despite the fact that the past winter was extremely warm.
Investors continued to face the usual problems: a lack of proper infrastructure and good services. This continued to keep Bulgarian on the map for companies that wanted to offer their customers cheap properties. These problems, however, could be solved in the future as long as there was one major investor in each region who wanted to promote the area and benefit from it.
