Holiday properties seem to be the worst affected area within Bulgaria with the Registry Agency reporting a 10% decrease in the number of deals being done. Many estate agencies in the country are also reporting a surge in the number of properties, particularly in regions such as the Black Sea cost, being put up for sale.

Direct foreign investment is also said to be down, although there are many property investors – mainly from Russia and the Middle East – who are said to be snapping up good properties at bargain basement prices.

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Investors – both foreign and home – played a massive part in the Bulgarian property market with over 11.3 billion Euros invested during 2007, over 2.3 billion Euros more than was invested in 2006. 40% of the foreign investors buying in Bulgaria came from the UK, closely followed by 38% from Russia.

This foreign investment in Bulgarian property has had a positive impact on the Bulgarian economy – the extra input of cash has allowed the country to make infrastructure improvements around the country, and this in turn has led to even more construction. Nikolin Gavrailov, President of the Bulgarian Entrepreneurial Chamber in Building, has revealed that the turnover for industry in 2006 was 5.6 million Euros with construction in a number of sectors including apartments, retail units and administrative building. He also predicted that the construction sector was set to increased between 12 and 16% year on year until 2010.

This is good news for those who have invested, or are looking to invest, in Bulgarian property. Better infrastructure means more tourism and more homes and this must be good news for rental returns and property price growth.

There is more good news on the horizon too – the Bulgarian government has made big changes to the tax system with both income tax and corporation tax set at a flat 10%. This new rate applies to all works, investors and companies, regardless of income and profit, and this means that Bulgaria is fast becoming a very tax-efficient place to invest in or relocate to.

All this means that despite the doom and gloom of some predictions, we at BuyingForeignProperty.com believe that there is still life in the Bulgarian property market and, although property price growth may slow a little, there are still good returns to be made on property in Bulgaria.

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Recent figures from the National Statistical Institute (NSI) show that across the whole country, property prices are rising with the first two quarters of 2007 showing growth of around 5-6%. Prices in Sofia are around 1, 648 leva per square foot – that’s about €78,000 for an apartment; A similar apartment in Luxembourg would set a property buyer back around €485,000.

With the news that budget airline EasyJet set to start flying into the capital city late this year, tourism is expected to increase, particularly those looking for weekend breaks. This will help push property prices in the capital even further helping property investors realise excellent return on investment in a short period of time.

Sofia has a good mix of property for sale – from off-plan purchase right through to fairly old apartment blocks. There is an under-supply of new apartments in the city centre therefore if you are able to buy off-plan, there may be a quick return to be made. If not, expect to pay around $50,000 for a one-bedroom apartment. Rental incomes vary, but choosing carefully can net you a rental income around the 8% mark.

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In the two quarters of 2007, the average price for an apartment in Bulgaria rose by 5.4%. For the first time in history, floor space for an apartment has risen over the 1,000 leva (approximate US$690) per square metre mark to 1,041 leva per square metre. At the start of the year, the average price per square metre was just 988 leva.

Unsurprisingly, the most expensive apartments tended to be located in Varna on the Black Sea Coast, where apartments average 1,710 leva per square foot, and Sofia, where apartments average around 1,648 per square foot. And it’s not just the new builds either – although there are huge numbers of new apartments being built around the country, old apartments are still popular and are increasing in price alongside the new-builds.

Part of the attraction of older apartments are that they are already built – many people buy new apartments off-plan meaning a long wait before they can actually move in. There is also an undersupply of new apartments meaning the less picky buyers are going for older apartments.

Experts predict that prices in Bulgaria will continue to rise. If you choose well, you may see double digit rises in your property’s value, however the majority of property in the country is expected to rise by about 5-6% a year. Even with the property price boom of the last few years, apartments are still cheap by European standards with a new build apartment at the All Seasons Resort near the ski-resort of Bansko starting from around US$60,000.

If you are planning to buy property in Bulgaria, check out our guide to the buying process here.

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Bulgaria has been chosen as it currently does not have any property like this. Many Middle East investors have expressed an interest in buying property in eastern Europe however nothing to their taste has yet been built. Bulgaria is attractive because it has stunning scenery, and the cost of living is a lot lower than more traditional European property hotspots such as London, France and Spain. Bulgaria is also a natural place for those looking to make a fast buck – since Bulgaria’s invitation into the European Union, property prices have jumped by 20%. With Bulgaria now a part of the European Union, property prices are expected to leap up further during the next couple of years.

Although the initial properties will only be marketed in Dubai, the offer is open to anyone. However the 10 exclusive cliff villas will be offered by invitation only, and it is likely that they will only be offered to top Middle Eastern businessmen.

If you are looking for World-class luxury on a scale never seen before in Europe, you could do worse than to invest in one of the luxury villas up for sale, particularly in a market where property prices are set to be buoyant for the forseeable future.

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Many resorts in Austria, France and Switzerland have failed to see much snow this winter. Some snow has come so late that many resorts have been forced to shut, or change the type of activities they traditionally offered. In stark contrast, Bulgaria is in the perfect position with cold winds coming in from the North bringing lots of snow. Popular resorts are Borovets and Pamporovo and each receives about 15cm of snow every day. Tourism is at an all time high and it is predicted that by the end of the season, nearly 1 million tourists will have visited Bulgaria for it’s snow.

The increase in snow-seeking tourists could be a boon for investors looking for buy-to-let properties. The properties are still fairly cheap in most resorts with apartments starting at around £30,000. The average rental rate is €80 per night, and with tourism set to increase to record levels, a Bulgarian snow-covered property appears to be a superb investment opportunity.

The hot-spots in Bulgaria for 2007 are tipped to be Bankso, Pamporovo and Borovets. Borovets is the cheapest of the three resorts with a 1 bedroomed apartment costing around €50,000. Bansko has one and two bedroomed apartments around 200 metres from the main ski lift for around €65,000. This resort is particularly desirable as it has excellent amenities already in place therefore is one of the places predicted to be the place to be in 2007. Lastly, a one bedroomed apartment in Pamporovo, 500 metres away from a ski lift is also around €65,000.

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Buying in the more established locations such as Varna, Sofia or Barovets may seem more expensive but in the long-run, it will probably be a better investment. Remember that buying a cheap property will have extra expenses – you may need to renovate, there will be language difficulties and it may be difficult to rent out if it isn’t in a tourist hot spot. Eco-tourism is a growing market in Bulgaria, so this is possibly one of the things you might like to keep in mind when buying a property and marketing it.

The actual buying process

Preparation
When buying your property, it is advisable to also buy the land that the property stands on. Ensure you know the procedures and legislation from the Bulgarian National Constitution of 1991 which allows foreigners to buy land legally. Acquaint yourself with the Bulgarian property law details and their buying procedures.

Viewing
Viewing the property in Bulgaria is strongly recommended. Organized 4/5 days trips are ideal as you can check out not only the house, but the surrounding area.

Deposits
When you are completely satisfied that the house is in order, you can place a deposit on your house. You will need a signed receipt for this deposit amount. The deposit should ensure that the house is taken off the market.

You will not be able to finalize your property transaction until all documentation has been signed and is in place. When you sign documents, make sure it is in the presence of a good, fluent translator so that you understand what you are signing and you have complete understanding of every stage of the process.

If you like to see a list of properties for sale in Bulgaria, please click here

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