Distressed Properties
With the pound still weak by historical levels against the Bulgarian Lev and the Euro many Bulgarian properties are apparently great value at present.
I use the word 'apparently' as anyone who has been interested in Bulgarian property over the last ten years will be aware of the rapid growth in prices which took place in the years prior to the world economic problems of late 2007 onwards.
For this reason I sold my property in late 2006, just ahead of Bulgaria entering the european union. At the time most people would probably have thought me crazy, as prices were predicted by some estate agents to double after eu membership started.
Without wishing to gloat, or say I told you so, my reasons for selling just prior to bulgaria's entry to the eu were due to a mixture of gut feeling and research.
My selling decision was based on a number of factors including:
Property prices were rising far quicker than Bulgarian wage inflation. Whilst this was also happening in many other countries including the UK, the ratio between what the average bulgarian was earning, and what was been asked for property was crazy in my opinion.
Whilst most people rightly expected that wage inflation and the general cost of living would rise after eu accession, they forgot about supply and demand economics.
In Bulgaria the population is roughly eight million people, and this number has been declining due to bulgarians emigrating to countries such as the USA, and the wealthier eu states, such as the UK. Also there has been an exodus from the countryside to to Bulgarian cities such as the capital Sofia, where the jobs and opportunities are greater.
This was evident when you looked at the large number of bulgarian property websites that appeared mainly from 2004 onwards targeting english speaking clients. The property listings often showed the interior of the property which at best would be filled with old fashioned furniture, or worse would be delapodated. This was obvious to me that there was over supply in the rural property market in bulgaria.
Another reason was the illogical corralation between the property for sale, the area and the price. Even today you can see good priced bargain properties from distressed sellers and normal vendors, mixed with properties with no roof and cracks in the walls for tens of thousands of euros.
A third reason is the Bulgarian culture regarding property. Having spoken with many Bulgarians I discovered that like the Germans, Bulgarians like modern property and not the 'quaint' old rural properties that nationalities like the British are often attracted to. This means that it was the 'foreign investors' which were driving the property market.
Now in the age of distressed properties available for sale from UK and other sellers there is little demand for distressed rural property in Bulgaria.
The exception to this is from expat retirees relocating to Bulgaria, who should expect a large discount on rural property, distressed or otherwise.
