Where next to invest? We profile the world’s top property hotspots, detailing everything an investor needs to know.
8.1pc in Q4 2016 (Portugal, NSI)
45.8m lev (Revenue from Nights Spent, NSI)
3 in 10 Bulgarian enquiries (2016, TheMoveChannel.com)
Where is it?
The Burgas province is the beating heart of Bulgaria’s property industry, with the Black Sea coast along the east of the country providing thousands of tourists every year with beautiful beaches at bargain prices. The city of Burgas, despite the large Burgas Bay, is itself not the focal point of activity, but the area is home to Sunny Beach, Sozopol and other resorts up and down the shoreline.
Who lives there?
In towns such as Sunny Beach, you will find a very small permanent population, as the strength of Bulgaria’s beach towns lies in their booming numbers in the peak holiday months: during the summer, each resort sees its number of residents swell significantly, as vacationing Bulgarians and foreigners descend upon the area’s hotels and rented accommodation. Budget-tripping Brits are joined by Russians, Germans, French tourists, those from the Czech Republic, and other Eastern European countries such as Romania, Poland and Austria.
For overseas investors, Bulgaria’s property market has always been tied to its tourism industry and the country’s international appeal is as strong as ever: in March 2017, the number of foreign arrivals in the country rose 20.1 per cent year-on-year, continuing a trend of rising overseas visitors.
Alongside Bulgaria’s beautiful beaches, its cost is a key part of that appeal: 2017’s annual index from travel website Hoppa ranked Bulgaria’s Sunny Beach as the cheapest holiday destination in the world. It is no surprise, therefore, that the total number of nights spent in all types of tourist accommodation is also on the up.
With Bulgaria’s economy also strengthening, the result is a market that draws both holiday home investors and buy-to-let investors. Indeed, at a time when the UK’s buy-to-let sector is tightening rules and raising costs, Bulgaria’s low property prices and record low lending rates (at an average of 4.5 per cent) are helping to fuel foreign interest. For British investors, the chance to offset the weakening of the pound since the country’s vote to leave the European Union is particularly attractive.
Bulgarian capital Sofia is leading the rise in residential property transactions, but Burgas and other Black Sea areas such as Varna are also seeing sales growth of between 5 and 10 per cent, according to Bulgarian Properties. On TheMoveChannel.com, Burgas made up 30 per cent of all enquiries for Bulgarian real estate in 2016. With Varna accounting for 13 per cent, the Bulgarian seaside is responsible for almost half of all investment activity. The country has been among TheMoveChannel.com’s Top 15 most popular destinations for five of the last six months.
As well as the potential for rental income and the offer of an affordable lifestyle, capital growth is also reinforcing Bulgaria’s property credentials: in Q4 2016, the country’s house prices rose 8.1 per cent year-on-year, compared to 2.4 per cent growth in Q4 2015, and above the 4.7 per cent average recorded in the EU.
Commercial property is also a particularly popular target for investors on TheMoveChannel.com, with the strong Burgas tourism market opening up affordable opportunities in the country’s hotel sector.
In February 2017, official figures show that total revenue from nights spend by tourists in the country jumped 7 per cent year-on-year to 45.8 million leva. Revenue from foreign visitors increased 14 per cent. Accommodation supply, on the other hand, decreased 2.3 per cent, with the number of beds down 1 per cent. With occupancy rates up 1.6 per cent percentage points year-on-year, there is growing potential for improved revenue for commercial property investors. In Sozopol, for example, one hotel’s occupancy rate has risen from 56 per cent in 2014 to 59 per cent in 2015, with a forecast of 70 per cent for 2016.
Bulgaria has traditionally been a popular market among Russian investors and others from Eastern Europe. Today, a significant quantity of transactions are now carried out by domestic buyers and investors, a sign of how much confidence has grown in the nation’s housing market. British buyers keen to find more affordable opportunities to counter the weakness of the pound are also looking to Bulgaria’s tourist hotspots for profitable investments, both residential and commercial.
“Bulgaria’s growing economy and strong tourist credentials make the country’s Black Sea coast one to watch for 2017.”
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