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A Buyers' Market? - Bag a Bargain


Time to Bag a Bargain?

With the global credit crunch, there are many properties for sale by owners who are really keen to sell to help their personal financial situation. Many of these owners re-mortgaged their property heavily back home in order to buy and are now pretty much cash strapped. Properties in the UK, France and Spain are still going down as their economies carrying on suffering.

Whilst local Bulgarian vendors don't usually have any financial pressures to sell and will stick firm on the market price for their property, many overseas investors really do need to sell and there are some keen prices to be had. Some vendors will take whatever they can get, which is not a reflection on the Bulgarian property market but a reflection on their personal finances.

This opens up some great opportunities! Maybe now is the time for those with a keen eye for a good property deal to bag a Bulgarian bargain.

News On the Ground

It has been reported that Bulgaria is now turning into a buyers' market. What is a buyers' market? When supply outstrips demand and the number of potential purchasers falls. This certainly does not seem true of all of Bulgaria.

The majority of property coming onto the market from those selling because of financial pressure is mostly in the resorts. Across the remainder of the board, it is a different story. From a straw poll, we found a firm picture of good buying activity from both Britons and other nationalities. Here's a sample of comments:

"I sold my apartment within two days"

"Last year there were no foreign owners here, now we have one British, one Dutch and one German family, plus a British family are building a hotel in the town"

"We live in a large village and have put one of our houses up for sale at 110,000 euros. Everyone who's contacted us, apart from one German, has been Bulgarian".

"We bought 4 off plan apartments in Sofia a year ago at 600 euros a sq.m, we've just sold one of them at 950 euros a sq.m. and another at 1,000 euros a sq.m."


The Future

In the long term, the basics are in place. The Bulgarian economy is growing and there is low taxation.

New construction is being reduced with tighter building regulations, together with the market stabilisation. Bulgarians are becoming much more affluent and there is an emerging middle class, plus huge interest from countries outside the EU.

Prices achieved per unit are up (inner city apartments for example, rose by 8% in just three months this year) with buyers looking for quality, which is a sign of the market maturing significantly. Buyers are taking less mortgages, so they tend to be more financially sound.

Our top tip would be to leave the British attitude at home and don't think you'll buy and then make a 50% profit in six months. The view to take regarding Bulgarian property is that of medium to long term. Buy and hold for three to five years.