Sun09232018

Last update12:12:22 PM

Back You are here: Home Property Where to Buy A Capital Investment – Sofia

A Capital Investment – Sofia

Sofia could be described as Bulgaria’s greatest property hot spot. It still has the lowest property prices in Europe compared to all other European capitals and demand for property both in the residential and business sector far outstrips supply. As capital cities go Sofia is small in comparison to other European capitals, yet over the last five years its population has doubled in size to 1.2 million people and over the next five years the population is expected to grow at an annual rate of 100,000 new inhabitants.

Naturally, this rapid growth in population will have a positive impact on the demand for residential property and whilst there is a high rate of construction in the city at the moment demand still outweighs supply.

The demand for property is driven by the emergence of the Bulgarian middle classes who require new, modern properties, growing prosperity and the growing supply of modern lending facilities.

Easy Access

Sofia’s perfect geographical location at the crossroads between East and West give it an added advantage. The city has invested much in its infrastructure and has strived to improve transport links with neighbouring countries. Today easy rail and road access exist between Istanbul, Belgrade, Skopje, Ohrid, Strumitsa, Nish, Athens and Thessaloniki. Air access to Sofia has improved tremendously and its airport has received 250 million Euros in investment and is attracting more and more low cost airlines like Sky Europe, Wizz Air and Easy Jet. Frequent flights now operate to London, Paris, Amsterdam, Vienna and Brussels increasing the number of business and recreational visitors to the city. The increase in the number of budget airlines has made the city more accessible.

Commercial Expansion

Business parks are springing up all over the city and demand for office space remains high, a 165,000 sq. m. Business Park is under construction close to the airport, the development will include a 250-bed hotel. The city has also seen large-scale development of huge shopping malls, which have attracted many international brands Marks & Spencer, Intersport, and Carrefour. Carrefour alone is planning to invest over 80 million Euros in the city by constructing a 70,000 sq. m. hypermarket and mall with an entertainment complex and restaurant facilities. Bulgaria’s accession to the EU has dramatically improved the prospects for Sofia’s labour market and significant increases in jobs sparked by the influx of foreign businesses like Alcatel, 3M, GlaxoSmithKline, AT&T, BNP Paribas, Ericsson and IBM choosing the capital as their base has had a positive impact on salaries, which are estimated to grow at 8% per annum.

 

 

The city’s low unemployment rate of only 2% is classed by economists as a state of full employment. This in turn will impact on demand for residential property as more workers seek accommodation close to their place of work.

Luxury Developments

The growth in luxury developments has increased as has the expansion and construction within the city’s suburbs as more affluent workers demand a higher standard of residence. Housing estates on the outskirts of the city has been intense especially to the South of the city. Villages to the North and West are also experiencing a rise in prices. Current new builds are improving in the standard of build and the provision of facilities in line with demands from Western buyers. Oxford Business Group recently reported an anticipated growth in “stylish new city suburbs” offering quality residences with easy access to Business Parks and shopping malls.

Buoyant Resale Market

Residential property buyers consist of Bulgarians currently living in the capital, Bulgarians living abroad, overseas buyers and foreign businesses. The average prices for apartments in the centre have doubled over the last two years and this upward trend is expected to continue at a rate of 15% to 20% per year until prices stabilize in line with levels in other Eastern European capitals. The shortage in supply of good quality residential property will have a positive effect on the resale market.

 

Maturing Rental Market

More than 90% of Bulgarians own their own property and 60% of Bulgarians own second homes. The capital attracts a higher amount of businesses and workers than any other part of the country, which makes for a mature rental market. Rental yields are extremely good at 10.65% and demand is high with Sofia yielding the third highest rental incomes in Europe. Property to the South of the city commands the highest incomes. Demand comes from the growth in foreign workers employed by the growing number of multinational organisations. High-spec two to four bedroom apartments are growing in popularity with local people. Growth in demand and rental incomes is expected to rise as more quality accommodation becomes available and existing tenant’s expectations rise.

Capital Hot Spots

The outlook for Sofia is excellent, but before you rush out to bag the nearest bargain, it’s worth researching a little about the capital. The property market across the country has also shifted in favour of style and luxury, which means that location, is the key to a successful investment. If you are looking to invest in Sofia’s thriving residential market, then consider some of the following locations:-


Doctors Garden
Doctors Garden is one of the city’s best loved parks. It lies between Shipka and Oborishte streets east of the National Library. The park itself has plenty of tidy children’s play areas, decorative flower borders and an impressive monument to honour those medics who served in the Russo-Turkish War of 1877-78. This small area of the city has given rise to some luxurious apartment blocks, which are inhabited by Bulgaria’s jetset. Doctors’ Garden’s popularity lies in its close proximity and accessibility to city centre offices and entertainment as well as the fact that the area has been kept spotlessly clean. Apartments in this area are priced around 2,000 to 2,200 Euros a square metre.


Vitosha
On the outskirts of the city yet conveniently linked by extensive bus routes, this area of the city is extremely popular because of its scenic backdrop Mount Vitosha. Vitosha is also the oldest national park in the country and offers visitors plenty of opportunities for hiking and skiing as well as providing some therapeutic mineral spas. Indeed journey times to the centre of the city are 20 minutes – the same time that it takes to take the chairlift up to the top of the mountain. There are a number of luxurious developments in this area, some of which are used as out of town, weekend retreats for busy executives and others as a permanent pied a terre for city workers. Prices for one bed apartments start at 112,000 Euros.


Yellow Brick Road
A large portion of the central district of Sofia is paved with yellow stones hence the name of the area. It runs around Sofia’s famous landmark, the Alexander Nevski Cathedral. The area encompasses some of the city’s most attractive architecture and is lined with chestnut tress giving the area a cosmopolitan feel. Living on the Yellow Brick Road really does mean living in the heart of the city. Rental incomes in this area are high and the rental market is growing from strength to strength here. Property prices start in the region of 90,000 Euros.


Lozenets
Another Sofia hotspot is the Lozenets area, which lies close to Juzen Park and within walking distance of Vitosha Boulevard, is within easy access of all amenities, entertainment facilities and city offices. Rentals in this area are highly sought after and command a high price. The area is clean and pleasant with plenty of green spaces. Prices in this area start at around 100,000 for a one bedroom apartment.