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Bulgaria: Will it be Sand, Snow or City?
By Graham Norwood, The Independent, 26th July 2006
As emerging property markets go, few can rival the hype or promise
of Bulgaria, three areas of which are now being heavily marketed
to British buyers.
The first is Sofia, one of the oldest capitals on the continent
with plenty of classic central-European architecture - the beautiful
buildings which predate the 20th century alongside the less appealing
Communist-era designs. But it is its future that is most attractive
to investors.
"If Bulgaria gets EU membership - widely tipped for sometime
in the next three years - the city will become a viable option
for firms to base their central European HQs. That'll be a major
benefit to the economy and demand for homes" says Mike Wellings
of Winslow Developments, a British firm that has built apartments
in the city.
Typical properties there include the Cherkonova apartment block,
where units are priced at €£913 per square metre - relatively
low for the capital - with specific properties starting at €£64,225
(The Right Move Abroad, 020-8453 7516).
A second investment area is the ski region, chiefly the town
of Bansko, although Pamporovo and Borovets are also now popular.
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Jeremy Casey of The Right Move Abroad says the ski season is
only four months long so the key is to get homes "very closely
situated to the ski gondola".
But Bansko in particular is attempting to lengthen its tourist
season by installing year-round facilities in addition to the
65km of Pirin Mountain skiing. Developments are improving in quality,
too, drawing in better builders and established estate agents.
For example, Hamptons International is marketing White Firs, a
scheme of predominantly two-bedroom apartments most with uninterrupted
views of the slopes and overlooking the golf course. (From €£75,000,
0870 428 9081).
But while there remains general confidence that Sofia and Bansko
will be good long-term bets, experts are more circumspect over
Bulgaria's third investment region - the Black Sea resorts in
the north of the country.
Some say the large-scale development of the past decade is a
sign of a maturing market. "The coast has had a tremendous amount
of development which I think will harm the rental market for the
next couple of years," warns Casey. But there is a different view.
"The right location on the coast will offer both excellent capital
gains and summer rental returns, but the season is restricted
to the summer months only," suggests Robin Barrasford of Barrasford
and Bird.
One scheme is the St Vlas Marina at Dinevi, regarded as one of
the most upmarket and developed parts of the area. Prices start
at £32,000 (Barrasford & Bird, 0845 600 1871). But whichever region
you may choose, Bulgaria does still hold traps for the investor
who neglects to do adequate research and fails to visit.Maverick
estate agents still exist, and there are many other pitfalls.
But rewards may be high for those brave enough to invest - investment property prices in the main Bansko area have risen by 30 per cent in three
years. It's all to play for - if you pick the right location.
Tips for investors
- Tax on purchases is not fixed, meaning investors face unexpected
costs.
- Investors must set up a company before they can buy a second
property or land in Bulgaria.
- Ensure contracts include guaranteed rental yields if they
are offered by developers and agents.
- Play the long game and do not rely on short-term capital
gains.
- Many holiday operators are switching from more markets like
Spain and Portugal to cheaper locations like Bulgaria.
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