Last update12:12:22 PM

Back You are here: Home Legal and Finance Finance Bulgaria Property Hunters in a Recession

Bulgaria Property Hunters in a Recession

With prices falling, property buyers, particularly those with cash or who can obtain a mortgage, are re-entering the Bulgarian market. When prices nose dive as they have done, buying at a good price is important and easier but it is also just as critical to still buy the right property. Housing recessions come and go and it is sure that this will not be the last, so whatever property you buy you need to make sure you will be able to hold on and ride out the next downturn.

Foreclosures have increased in Bulgaria, so too has the number of foreigners needing to sell in order to balance their finances back home. Buying a Bulgarian property is an investment option as the long term return offers good potential and with the way the market is today, now is the time to buy heavily discounted homes.

Previous recessions have shown, despite their devastating effects, that they are prime moments to buy property. In some areas price of Bulgarian property have dropped more than 30%.  This could be a once in a lifetime opportunity for many buyers.

Still, there are risks with buying during a recession. Falling house prices can make you feel like a child in a sweet shop if you are in a position to buy. With stardust in your eyes, it is easy to forget the fundamentals of location, condition and whether you even really like the property. We take a look at things to consider before buying your Bulgarian property during the recession.

Estate agents

Not all agents are con artists! However, it does no harm to make sure you are dealing with a reputable agent.

Agents in Bulgaria are not regulated, so do not need to be licensed. Proceed carefully and trust your gut instincts. There are far less rogue agents in Bulgaria now than before recession as many of the worst have gone out of business. Bear in mind that even so, some may be more desperate to make a sale given current market conditions.

Overpriced homes

There are still Bulgarian properties which are overpriced, which is not unusual in a depressed market where vendors often perceive the value of their property to be more than it is. If you have seen a property you fancy which has been on the market for a long time, it might be worth looking at it even if it seems expensive. It just may be that nobody has bothered viewing it because of the price, not made any offer for fear of offending the vendor. Step in, take a look and see what you can do.

Distressed sales

Foreclosures and distressed sales are readily available. Check out the listings on the Bulgarian credit agency website. An advantage to bank foreclosures is that the bank owning the property is likely to be happy to negotiate a mortgage with you. Be careful if you notice a lot of foreclosures in one area or region. Distressed sales can create a neighbourhood which goes downhill and starts to look run-down.


You may have a good credit rating and have a property in your home country but will still experience difficulty obtaining a mortgage in Bulgaria.

Think big deposit and high interest rates. It may be better to look to raising finance in your home country by re-mortgaging your property, particularly in the light of low interest rates in most of Europe. Even so, you'll still need to prove that you can match the new stringent lending criteria. Make sure you have a decent downpayment or have a lot of equity in your current home. If you are unsure whether you will be able to make repayments, then don't do it. One of the biggest risks is that after buying your Bulgarian property you can't make the repayments. Make sure you can conservatively afford the property as this is not a good time to be stretching your finances.

Saving your cash

Property prices can be negotiated, saving you as much as 30%. Those who are cash buyers clearly have the best bargaining leverage, so use it. It is surprising what vendors will accept and agree to - just don't go so far you offend them.

Tangible resales

The resale market in Bulgaria has become more active during the last month.

This is no doubt in partly down to the fact that resale property is tangible - you are buying exactly what you see, unlike buying off plan. No matter what the agent tells you, you are buying what is there at the moment. Don't be swayed by optimistic claims of new roads, new facilities and new airports opening as there is no guarantee that these things will come to pass.

Look for properties which have high demand yet low supply as these will always hold their value better.

Think long term

Buy a home and not a short term investment. The market may continue to decline, nobody really knows, so this is not the moment to get into 'flipping' property. Plan on keeping the property for a minimum of three to five years.

Permanent move

If you are buying for a permanent move, can you call the property 'home'? You may be used to the comfort and convenience of your home country where you can shop day and night. If this is what you are after, think carefully. If you are not keen on the culture or the people, then you probably won't be happy. If you are looking to slow down, enjoy more of your own time, a cheap cost of living and a lack of nanny state, then there are lots of suitable locations.

If you follow our "golden recession rules" for buying a Bulgarian property, then the massive downturn in the property market might just be the biggest upturn in your life!