Why buying property in Bulgaria makes sense
- The Bulgarian property market has been recoovering since 2014.
- Sofia is a good choice for rental income yield.
- The Black Sea coast is popular with foreigner buyers.
Bulgaria is one of the most interesting property markets on the planet just now. This Balkan nation has seen a strong market for the last 5 years or so. Why does buying here still make sense?
The latest figures
In October 2019, it was reported that the nationwide house index in Bulgaria rose by 7.29% during the previous year. This was the latest in a string of increases, with a 2.3% increase seen in 2017.
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Interestingly, construction levels are low, with the number of new buildings falling each year for the last few years. Against this backdrop, the price of new houses rose by 11.9% in 2018 and existing properties rose by 5% in the same period.
There are all impressive figures in terms of growth, with no sign of the price surge slowing down.
Why is the market performing so well?
One theory is that the low interest rates in Bulgaria have been encouraging more people to invest in property rather than keep their money in the bank.
In truth, the market has been recovering since 2014. This was when the crash of 2008 started to get corrected. It has been a long road back from the dark days of 2008. 2009 was the worst year, with prices falling by over 25%, but the market has been buoyant for several years now.
The big cities are the most sought-after locations here, with the capital Sofia leading the way. In this city, the yield on rental properties is up to 6%, with some student apartments in popular areas offering more than this.
Does it make sense for foreigners to buy in Bulgaria?
This is one of the easier countries for anyone looking to buy property abroad to deal with. Paperwork isn’t as bad as in many other places, while taxes and other costs for buying a house are relatively low here.
Houses are still cheap here when compared to other parts of Europe too, as the Bulgarian economy has traditionally been relatively weak. It has been improving lately, but the coronavirus outbreak has meant that ING reset the growth forecast for 2020 from 3% to 2.1%. They left the 2021 estimate unchanged. So there is no sign of a recession or any other major issues on the horizon.
Away from Sofia, foreigners are largely attracted to the pretty Black Sea coast, which is known as the Bulgarian Riviera. With almost 400 km of coast, there are many different towns and cities here. It has become something a hotspot for digital nomads in the last few years, with Varna especially popular with internet workers.
The cost of living is low here when compared to Western Europe. This makes it tempting for anyone who wants to make their retirement funds go further or stretch out their freelance earnings while enjoying a good lifestyle.
Bulgaria’s economy has been growing since it joined the EU in 2007. Coronavirus fears may slow it down in 2020, but overall it is looking healthy. In terms of the property market, the boom that started in 2014 looks like continuing.
It adds up to a place where you can find reasonably priced houses and a growing economy where the future looks promising for investors.