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Thursday, December 28, 2006 

Cheap Bulgarian Property Tempts the Russian Buyer

In Soviet times, Bulgaria was a cheap, if not always cheerful, option for Russian tourists looking for a seaside vacation. Decades later, the country’s improved infrastructure and potential European Union membership, all amid a familiar Slavic setting, is tempting Russians to invest in Bulgarian property.

One of the newest destinations on the international real estate market, Bulgaria is appealing to Russians not just for its pleasant climate and cultural affinity, but also because of low prices. For example, a small resort apartment sells for as little as $35,000, a price tag that is inconceivable in Western Europe.

The market in Bulgaria was especially lively last year, said Darya Pushkaryova, a representative of Best Active, a company specializing in real estate in Bulgaria and other European countries.

Last year, prices grew by 30 to 40 percent, but they have leveled out since then after an explosion in development swamped the market with a supply of new properties.

Though no longer the hottest destination in terms of investment, Bulgaria’s prices are still low among other resorts with developed infrastructure.

Russians with relatively modest means are increasingly seeing property in Bulgaria as potential summer homes, said Kim Waddup, the director of the International Property Show, which took place in Moscow last month.

“The market of international real estate is finally moving because affordable options are drawing in more Russians. ... Not only the wealthiest businessmen looking for luxury property,” Waddup said.

“I spoke with two retired university professors recently, who were looking at an apartment in Bulgaria,” he said.

“These days, going to Bulgaria takes as long as driving to your dacha that is four hours away.”

This year, there were 14 Bulgarian real estate firms at the International Property Show. This is a marked change on the 2004 show, when none of the 34 firms present were from Eastern Europe, but from more traditional investment choices like England and Spain.

“Right now, more people are buying property in Bulgaria to keep for themselves, rather than to invest, since Bulgarian prices are not growing as rapidly as those of Montenegro, for example,” Pushkaryova said.

Another destination that is extremely popular, Montenegro has a less-developed infrastructure, and attracts people who enjoy Balkan rural landscapes more than the condos that spring up across ex-Soviet Bulgaria.

Bulgaria’s current bid to host the 2014 Winter Olympics, however, is creating interesting opportunities in the country’s ski resort properties, where developing infrastructure is driving up the price, Pushkaryova said, and Bulgaria’s imminent EU membership will continue to push up prices.

What is more, owning property in Bulgaria also entitles the proprietor to residency rights. Russians, who usually need to go through the bureaucratic hassle of visa applications to visit Europe, will certainly bear this mind when considering real estate investments abroad.

Source: The St Petersburg Times

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