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 Interest from Brits Down 70%  14.12.2007 back
Interest in holiday properties in Bulgaria from UK buyers has decreased by 70 per cent. Buyers from the UK now account for 40 per cent of buyers of holiday homes and Russians 38 per cent.

Prices of holiday properties in Bulgaria’s mountain resorts increased by 10 per cent in the period 2006-2007. The supply/demand ratio remained the same, according to Green Life Property Development research, so ensuring a smooth development of the market during the new winter season.

However, interest in holiday properties in Bulgaria from UK buyers has decreased by 70 per cent. This was mainly due to the mortgage crisis in the US and Europe. The downward trend affected the world market as a whole, not only Bulgaria.

The holiday properties market in Bulgaria has also been undermined by various stories about over-construction in resorts.

“We are continuing to sell our projects successfully, although the market is encountering some difficulties because of the mortgage crisis and rising interest rates,” Nikolai Pehlivanov, Green Life’s executive director, said. Green Life has seven finished holiday complexes in Bulgaria and is developing its eighth project in Bansko called Paradiso Verde Ski&Golf Residence. Investors said 95 per cent of all the apartments in the first stage of the new complex’s had been sold, mostly to UK buyers. Prices were in the range of 1000 to 1400 euro a sq m.

Recently, Green Life won a gold award for the Best Holiday Apartment in Bulgaria at the official ceremony of the prestigious Homes Overseas Awards. Green Life entered its Paradise Bay Apartments & Hotel project,  in the Paradise bay of the town of Sozopol in the competition.

The number of English-speaking buyers, formerly the market’s most active players, is now on a par with Russian buyers, Green Life research showed. People from the UK accounted for 40 per cent of buyers of holiday homes and Russians 38 per cent. Scandinavians made up 3.64 per cent of the market and Greeks just 1.84 per cent.

This has altered the ratio between buy-to-let purchases and second home purchases. In 2006, 40 per cent of all holiday homes were bought as buy-to-let purchases. In 2007 this percentage doubled. This was because Russians were buying for investment purposes without necessarily being interested in winter tourism.

“The Russian ‘invasion’ of the Bulgarian property market is good news for both real estate and tourism industries,” Green Life representatives said. Russians are high category clients and have high expectations towards the estates and the services offered. The increased demand from Russians is driving the development of Bulgaria into a more luxurious destination.

“The withdrawal of Brits from Bansko stalled land prices in the cherished winter resort,” the representatives said.

Land in Bansko could be bought for prices in the range of 50 to 200 euro a sq m. Holiday apartments in the mountain resort are on sale for 1200 – 1600 euro a sq m. Green Life research showed that about 5000 apartment sales were about to be realised in Bansko during the new active season.

Pamporovo is also being looked at by investors. The resort is largely known to Russians, but there is an urgent need for improvement of the facilities and the equipment in the resort, otherwise investor interest will cool off. Holiday apartment in Pamporovo were now priced between 1000 and 1300 euro a sq m.

Borovets remained the most expensive Bulgarian mountain resort with prices of holiday apartments ranging from 1500 to 1700 euro a sq m with land prices in the resort at 200 to 300 euro a sq m. For comparison, in 2006, land in Borovets was sold for between 80 and 250 euro. The recently started large-scale project called Super Borovets is driving up prices in Borovets and the surrounding towns and villages.

Experts say Brits are going to return to the market in two years, when the mortgage crisis is expected to have blown over. Meanwhile, local investors will have increased the level of products and services on the Bulgaria’s property market, Green Life said.

Green Life’s expectations for 2008 are that prices will increase by 10 per cent in mountain resorts and by 15 per cent in the coastal resorts.

Source: Sofia Echo

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