More About Bulgaria Property
Bulgaria is located in South Eastern Europe, situated at the heart of the Balkan Peninsula. Bulgaria boasts an old and rich history. Many of the world's greatest cultures have inhabited this beautiful country, leaving behind a veritable treasure trove of untold historical riches. There are 3 main areas of interest for Investors in Bulgaria.
1. Sofia, The capital city. Year round flights and increasing foreign investment make this a very attractive prospect.
2. Ski resorts (Bansko, Borovets etc…) a very important winter destination, excellent ski facilities already with major investment being made to improve them with the possibility of a bid for future Winter Olympics.
3. Black sea Coast, this area is now becoming a major destination for package holidaymakers & with a number of different Golf courses in development is set to become a popular golf destination as well.
In recent years Bulgaria has become an extremely exiting prospect for real estate investors for the following reasons:
o Politically stable & Full NATO partner since 2003
o Currency pegged to the Euro
o Is a associate member of the EU, with formal accession to be completed in 2007 (This is historically when biggest growth occurs)
o High Growth Potential Bulgarian property values are still relatively low, despite values increasing by nearly 100% since 2002. Estimated figures for 2005 and future years indicate that there is still enormous potential for further growth.
The tourism industry, another indicator for capital growth is one of the countries major success stories. The high season on the Black sea coast is from the end of May - end of September and the warm weather & 220km of Golden sandy beaches combined with more and more low cost flights mean that this success is certain to continue and the number of visitors to the area is sure to rise from the 2m people that visited in 2004. Elegant Homes Worldwide's Investment focus & experience means that we have selected high quality developments in excellent locations to take advantage of the very obvious investment opportunities in front of us.
The property market in Bulgaria
Over the past year, property in Bulgaria has been one of the fastest growing markets in the World. In 2004, property prices went up by an average of around 25% across the country. However, regions such as Sofia and the Black Sea beach resorts have experienced 50% - 100% increases. Investors who have never considered Eastern Europe as part of their strategies are now rethinking their moves. Projected growth of over 20% - 30% in the next 12 months is a return that will attract novices and professionals alike. Investors in the know, consider Bulgaria to be the hottest property market around. Bulgaria is currently one of the strongest markets in terms of growth in the world. One of the main reasons for strong growth is due to the improved economic conditions and political and social stability within the country over the last 5 years. Property in Bulgaria offers a great investment considering the long-term prospects of the country and offers considerably better value for money than other European destinations. The majority of the purchases in Bulgaria are for holiday homes, often with a view to retirement in later years.
However, there are now an increasing number of investors who are buying property now with a view to making a capital gain in the short, medium or long term. This increasing interest, along with other factors such as the rise in tourist numbers and increasing awareness of the opportunity makes Bulgaria one of the best places to invest in today. Bulgarian real estate prices are far lower than other destinations in Europe but the acceptance of Bulgaria into the European union provides unprecedented growth potential that will certainly boost the prices of the Bulgaria real estate in the near future. The Bulgarian real estate market is still relatively unexplored and undeveloped, when comparing it to other countries such as Spain and France.
In 2003 the proceeds from tourism comprised 13% of the country's GDP. Bulgaria's rising property prices have been greatly influenced by the EU, which has had a tremendous impact already. This will be even greater after the country has joined the EU in 2007. Joining the EU means investing in Bulgaria is a fantastic proposition. Already, Foreign and EU money is pouring into Bulgaria to stimulate economic growth. The building of new properties will be encouraged (and property taxes slashed) to bring it in line with the rest of the EU. The property prices on the Black sea coast grow much quicker than any other areas in Bulgaria due to its popularity.
The black sea coast stretches all the way down the east side of the country, most of which is flat, thus ensuring that most of the resorts have panoramic views. Bulgaria will sign an 'open-skies' agreement before joining the EU in 2007, thus opening up the market to low cost carriers such as Easyjet and Ryanair, who are currently waiting to get started. This will cause the number of tourists visiting the Black sea coast to soar. The most valuable property is that which offers beach frontage or beach views. This is due to the desire and therefore rent-ability. The most profitable form of investment is buying units in a new, off-plan development that is close to the sea, during the early stages. By buying before the project is complete you will benefit from excellent market growth, receive superior build quality and receive excellent payment terms.
The rental market in and around the resorts is very strong. You should look to rent a 2 bed property out during the summer season (April - September) for a minimum of 100 days at a price of at least €50 per day. The rental yield for this period will more than cover your mortgage costs. Due to a shortage of good rental property, it is currently in high demand by many tour operators, so there should be no problem in renting the property out for more than 100 days. They're several excellent rental firms that we can use both here and in the UK.
o Total purchase costs should not exceed 8% - 10% (this includes agents and lawyers fees) however this could end up being more, for older and cheaper property.
o Under Bulgarian law a foreigner cannot own land. If you wish to buy land or a house with plot then you can circumvent this law by opening a Bulgarian company. This company can own the land and house and a foreigner can have outright ownership of the company. The cost for setting up a company is low (under €1000) and we can help you set that up. With new Off-plan developments it is not necessary to own part of the land or set up a company, as foreigners can own buildings.
The Purchase Process
1. A reservation deposit is paid to hold the property.
2. If the property is a re-sale or land then a Bulgarian company must be formed to own the land.
3. An initial private purchase contract is then signed and initial payment is due usually 10% - 30%, depending upon whether a re-sale or off-plan).
4. The notary Act is then signed in front of a Bulgarian Notary in Bulgaria or the lawyer can complete on clients behalf with a power of attorney. In the case of off-plan purchase the notary act is signed once the building is complete. The time each stage takes place depends upon the type of sale. In the case of an off-plan development, private contract is usually signed within weeks of reservation.
Payment Terms
6,000 Reservation deposit to be paid and private contract signed by 31st July 2006.
30%. To be paid by 20th August (minus initial reservation deposit)
70%. On completion of Project (Estimated March 2007)
o Mortgages are available approx: 65-70% maximum.