Bulgaria in the Financial Times

gfplux

Bulgaria loses its allure for UK buyers

By Kerin Hope in Athens and Theodor Troev in Sofia
Published: February
British home buyers have disappeared from Bansko, a leading Bulgarian ski resort and until recently a “hot-spot” for people seeking moderately priced holiday properties.
Since the global credit crunch took hold, purchases by UK investors of Bulgarian properties priced between €45,000 ($65,000, £33,500) and €90,000 have fallen sharply, according to Sofia-based estate agent.
Hugh Fraser, of Sofia-based LS Property, said: “Our research suggests that only about 30 apartments were sold in Bansko last month and the buyers were Russians and Greeks.” This compares with sales two years ago of more than 500 properties a month to UK and Irish buyers.
Such a steep decline suggests Bulgaria’s holiday home boom, which has focused on Bansko and Sunny Beach, the leading resort on the Black Sea coast, may be over.
Property developers have been offering discounts of 8-12 per cent in buildings nearing completion in Bansko. Meanwhile, prices for new apartments in Sunny Beach have fallen by 7-8 per cent.
“Attitudes have changed. With house prices stagnating, it is much harder for UK customers to release equity to buy a second home,” said Rossen Dimov, managing director of Rockarch Estates, a London-based agency selling Bulgarian properties.
Mihail Chobanov, chief executive of Bulgarian Properties, one of the country’s biggest estate agencies, believes that about 50 per cent of UK investors who took a punt on the Bulgarian market four years ago are now trying to sell their properties. “Speculative buyers want to cash out and move on,” he said.
While tightening credit conditions have given the market a decisive downward push, Bulgaria’s appeal for UK investors was already starting to fade.
Rapid development at Bansko and Sunny Beach resulted in an over-supply of lower-priced apartments, putting a severe strain on local infrastructure. An estimated 85 per cent of UK investors bought properties off-plan without having visited Bulgaria.
On arrival in the country many were disappointed by mediocre construction quality and local developers’ lack of concern for the environment.
Rental incomes on the Black Sea coast have been lower than expected, according to investors. “Estate agents talked about a six-month season and yearly returns of 6-8 per cent. The reality is more like three months and under 3 per cent,” said David, a Dubai-based IT worker who bought at Sunny Beach two years ago. He declined to give his full name.
Two years ago 90 per cent of Rockarch’s customers were UK investors, including a sizeable number of expatriates living in the Gulf states. Mr Dimov said the client mix changed last summer, with cash-rich Russians replacing buyers from the UK. “In the past six months 60 per cent of sales were to Russians, 10 per cent to Greeks and Poles and only 30 per cent to the British,” Mr Dimov said.
Julia Titova, of Best Real Estate, a Moscow-based estate agent, said that Bulgaria had overtaken Montenegro and Spain as the most popular foreign country for Russians wanting to buy a holiday home. “Bulgaria is seen as an excellent place for family holidays,” Ms Titova said. “It is nearer than the Mediterranean and it is more affordable than the Russian Black Sea resorts.”

Generali

Houses in Poor Country Are Cheap.
Houses in poor country 'not expensive as previously thought' claims expert.
by Dave Bleedin-Obvious

Houses in Poor Country are actually cheap, claims a new report.

Over the last few years many reports have been published claiming that house prices in Poor Country should be moderately high. Further, these reports have claimed that these moderately high house prices are set to become very or even extremely high.

It transpires that these newspaper reports have been copied directly from the PR pieces by journalists that have never even visited Poor Country. The PR were given to journalists by Estate Agents and developers in Poor Country hoping that idiots from Rich Country would swallow the lot whole.

It seems that a steady stream of 500 Investors from Rich Country have taken leave of their senses and bought in Poor Country every month. Many of these Investors bought apartments that they hadn't seen and hadn't even been built at moderately high prices. Reports suggest that the Investors were hoping to sell at high or extremely prices in a few years to Fools or even Credulous Idiots.

An estate agent in Poor Country was quoted as saying, "It was like taking candy from a baby.

"A few of us had a whip round and hired some PR ladies from the Posh and Pretty PR agency. They then sent some very pretty, articulate and posh women to invite some journalists to a party to give them cheap wine and a load of chat about how house prices in Poor Country shouldn't be so low

"I could barely believe it when the newspapers in Rich Country printed this rubbish, even the ones that are supposedly meant for clever people. Even more incredibly, Investors from Rich Country actually believed it and started to buy! I guess the party's over now but I've made enough for Svetlana and I to start a nice family in a decent home which I just bought at a low price."

One Investor, Phil Mugg, said, "I feel so stupid, I spent a fortune on something that turned out to be worthless. I haven't made this bad an investment decision since buying all those shares in Obvious-con.com in 2000. At least I've still got the buy-to-let - know anyone looking for a new build to rent in cental Nottingham? Apparently the flat is lovely, that's what the bloke from Big House-Building Company told me anyway."

Trollfever

I guess that there is no FRAUD in the Bulgarian property market, unlike the UK & USA markets.

alessev

Houses in Poor Country Are Cheap!
So is that mean houses in UK are of good quality, althought not cheap? - i dont think so.
In the last few years in Bulgaria indeed has been home boom, and mainly around the sea and mountains. So far this new buildings are the Spanish type, a lot of flats and overcrowded.
I also know that a lot of British people prefer to buy there as it is cheaper to live(but the last yeat prices gone up), and most of them prefer the deep country instead of the resorts.
There of course is a lot + and - if not living in the houses, but this is a risk which any investor take when buying in foreign country.But if you can still get a house for around 5K and have a land around would you not?