Ski Resorts in Bulgaria

By: Jolis Eltilib

What is the average property price in the region?

Bansko has a good property market, with residential properties and land for sale. Investors from Russia, Italy and England are showing significant interest in the resort. This has sent up the price of land. Prices have gone up with more than 30 % comparing to last year, and still going up. Over the last 3 years the price of land went up from 10 Euro/sq.m to over 120 Euro/sq.m and the interest of the investors continues to be high. The land in Bansko now costs between 30 and 160 euro per square meter depending on the location and status of the land. For now the most desirable land plots are those located around the lower end of the gondola lift around 80 euro/sq m.

The prices of the vacation residences in the town start from 700 Euro/sq.m and reach

1 200 Euro/sq.m. With average price of about 1,000 euro per square meter.

What style of apartments are on offer.

A boom of the construction of blocks of flats has been registered this summer. Construction of blocks of flats with smaller apartments of 50-70 square meters is the best seller. From my experience smaller flats sell quickly and easily. Most of the constructions follow the European standards and are competitive with the ones in Spain, France. Luxury completed property developments, are built to the highest standard with high quality building materials. Most of them are offered fully furnished with all facilities to be enjoyed by the residents. Other benefits are all year maintenance and security. Internally the apartments are created to fit the demands of a modern holiday home. There are more than 40 complexes built in the last 2 years and mostly follow this pattern.

What rental demand do these properties have? From who?

Ski resorts offer the best rental returns due to their year-round tourism capacity. The coastline, including resorts such as Sunny Beach, freezes throughout winter and most of the local amenities close, but the ski resorts remain very much alive.

After the development of the market and the large-scale new construction in the tourist regions the purchases are looked upon as an investment. The Britons buy mostly flats. They have limit of 50-70 000 Euro. These are common people who invest their savings and hope to 'catch the wave' buying cheap property, rent it for couple and years and eventually sell it after couple of years with good return. More and more developers, offering properties for sell added and rental contract as well with 10 % -15% of rental income of the price of the apartments and all year maintenance for the convenience of the clients.

I would advice everyone paying cash to invest in this place with great rental potential.

What rental returns can investors expect to receive.

Ski resorts boasting year-round rentals and yields of up to 12%, slightly more than those available in the coastal resorts, offer the best option for investors. Prime skiing locations such as Bansko and Borovets have strong long-term investment prospects, with the likelihood of securing guaranteed rental schemes with leading holiday companies who already operate in the area. They are interested in big and luxurious complexes, well maintained and offering all facilities for client's convenience. The main tour operator selling Bulgaria ski holidays in England is promoting mostly Bansko this year. During last 3 years Bansko was attracting many local people and foreign skiers and snowboarders on budget, with main resort advantage being the much lower prices comparing to Borovets and Pamporovo. The moment when Bansko will become the biggest ski resort in Bulgaria is very near. Without any doubt this is happening and property buyers who want to use these speculative opportunities will soon be rewarded.

How many residential developments have taken place over the last couple of years?

Millions of Euros were invested in the new skiing infrastructure of Bansko. Thousands of trees were removed and new slopes were made. Brand new and modern Gondola lift was built, starting from Bansko itself. The development of the property market in Bansko began together with the building of the ski faselities. New luxury hotels were built over the last years and other are under construction. At least 40 luxurious new complexes are being built in the town at the moment.. Till the end of 2006 accommodation capacity will be about 10,000 beds. Bansko now offers over 6,000 beds. There are also hundreds of small family hotels and private pensions offering accommodation.

Do you forecast any future rise in property prices? If so why?

Yes and I have a few reasons for this;

Following the country's transition to a European style economy, the growth of the property market has been significant and impressive. During the last five years Bulgaria has a very positive change in its rapidly emerging property sector, most notably in the larger towns, and of course on the Black Sea coastline. Infrastructure and transport links are rapidly improving also. The massive improvement in standards and the quality of the many new developments is impressive.

Properties are still one of the cheapest in here, but prices are constantly rising. The prices of real estate in Bulgaria jumped 48 per cent last year, a world record and the highest rise in prices registered in any country. Low interest rates were the main driving force behind the boom. But there are several other factors, including the intensifying flow of capital, aggressive bank-lending and a frantic search by investors, large and small, to find better returns than those offered by stocks and bonds.

The increase in foreign investment is set to continue also because of Bulgaria's expected EU membership perspective and the constantly expanding tourist industry. This makes the real estate market in Bulgaria one of the strongest and most profitable property investment markets currently and the growth is set to last. And when Bulgaria joins the EU, property prices will take off, rewarding early buyers.

The low cost of living combined with world-class ski and summer facilities means Bulgaria is now providing healthy competition to the French, Austrian and Spanish markets. And the opportunities presented by the new Eastern European markets have drawn two types of buyers: those looking for city-centre buy-to-let properties and those attracted by holiday properties with letting potential. And naturally Bulgaria offers both of the opportunities. The factor common to all is a desire to find better returns than are currently available in the UK stock market or in the British buy-to-let market, where average yields (annual rent expressed as a percentage of a property's value) have fallen to about 5 per cent. Younger investors now see Eastern Europe as a chance to make a quick profit and thus provide a way of getting on to the British property ladder .They are using the formula: cheap property + growing economy = great investment returns.

Not all buyers are driven solely by rental returns. Investors looking for the next boom area in Bulgaria should consider exploring some of the less well known and more rural areas of the country. Village houses in rural locations are also being bought with a view to modernizing and making a capital gain on their resale.

Worth mentioning is the fact that The Law on Foreign Investments provides additional protection to foreign investors. The first added protection granted to foreign investors is that the expropriation may only occur for exceptionally important state needs, which cannot be otherwise met. Immovable property owned by foreign persons may not be expropriated for municipal needs.

As another protection for foreign investors the Law requires compensation in the form of another immovable property in the same location, and only given the foreign investor's consent, in another location, or by cash if the foreign investor prefers so. Compensation equals the immovable property's market price on the day of expropriation.

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