2014 Sunny Beach property market

Sunny Beach is by far the most active part of the resale market, if you own a property in the region (Nessebar, Ravda, St Vlas, Kosharitsa, Pomorie or Aheloy) you will certainly be able to sell it if you ask for the current market price. There is demand across the region, although the volume and frequency of buyers is much lower than it ever was from the British and Irish during the 2004-2008 boom. The vast majority of buyers are now Russian, or at least Russian speaking and typically come from the ex-Soviet bloc: Ukraine, Kazakhstan, Belarus, Russia etc. These buyers are middle class / middle income and typically demand property at the following prices: studios for 15-20,000 Euros, 1 bedroom apartments from 20-30,000 Euros, 2 bedroom apartments from 30-40,000 Euros. Naturally in areas such as St Vlas the average achievable price is higher with sea view 2 beds selling for 50-60,000 Euros and likewise prices are less in areas such as Kosharitsa some 4-5km back from the coast, where studios are 13-15,000 Euros and 1 beds 19-22,000 Euros etc.

The tail end of the market remains in the outer locations where isolated developments such as Sunny Day 5 and Sunny Day 6 or The Vineyards are located. Price there are 8-10,000 Euros for studios and up to 22-23,000 Euros for furnished 2 beds. However, these properties do still sell, regardless of the lack of nearby amenities and considerable distance to Sunny Beach resort, there is still healthy demand at every level apart from at the high end. Sadly the toughest category to sell right now is in the top end complexes or largest 2 bedroom apartments, the Russian demand is truly not any more wealthy than any other and their funds are limited, hence the smaller cheaper units currently make up the vast proportion of sales across the whole of this area of the market. Dinevi developments around St Vlas marina are amongst the best quality, most luxurious and most appealing, yet the 1000+ Euro / sqm price tags results in almost no transactions. Only when apartments there are 800 Euros /sqm and under, ideally with good sea views, can sales be done at the high end of the market.

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Invasion of Crimea puts pause on Bulgarian property market

The recent annexation of Crimea by the Russian Federation has created waves of uncertainty in the Bulgarian marketplace. The Sunny Beach market is now effectively on hold; Russian buyers are paused indefinitely as they await the recovery of their currency to afford more Euros and reconsider their property options. Despite Russia pumping cash in to support the Ruble, it has devalued by 20% and is currently the second worst performing currency against the Dollar, in real terms in means that Russians who were about to buy a 2 bedroom apartment can now only afford a 1 bed, naturally they stop and don’t proceed.

March 2014 saw a 63% decrease in sales activity by comparison to 2013, a real concern from anyone active in the Bulgarian market, especially hopeful vendors. Anyone lucky enough to have completed their sale prior to Russia’s deployment of troops in Crimea can consider themselves very fortune and amongst the last cohort of successful vendors for some months to come. We suspect that the market will flat line for the next 6 months as buyers who had mentally settled on their ideal acquisition for their budget will either have to reassess or simply not proceed, the marketplace needs time for new vendors to come without the knowledge of what their budget in Rubles would have bought them prior to the Crimean land grab.


This month we have seen the first buyers tell us that now they will consider buying in Crimea instead of Bulgaria, now officially part of the motherland: no visas, almost the same weather sharing the same Black Sea climate, the quick comparisons are clear. Whilst there are a distinct lack of modern resorts to rival places like Sunny Beach, Golden Sands or alike, the fact that its geographical similar and coastal results in it being worthy of comparison and consideration. The immediate effect is for most buyers to hold off any decisions on buying in EU Bulgaria with its visas and length of stay restrictions, by comparison to simply driving to another part of Russia and being at a home from home and spending the Rubel.


Overall, the outlook for Bulgarian coastal property looks negative over the coming months, vendors much seriously consider any offers received if they are to successfully sell in 2014, the whole market expects a dramatic reduction in the volume of sales and real buyers this year.

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Must see interview for all vendors of Bulgarian Property, with Christophe Gater of New Estate.

Essential viewing for anyone looking to sell their Bulgarian property, this insightful interview exposes the reality of the current resale market and the key points that vendors must consider when thinking to sell their property in Bulgaria. Offering an inside description of the demand coming from Russia and the ex-soviet states, the key differences between what they want to buy and what the British and Irish did buy and now have for sale, through to comprehensive reasons not to pay any agency upfront fees before the actually sell your property.

Solid advice offered by a professional company seeking to allay myths and rumours from the marketplace and provide genuine guidance on the true state of the market. See below a synopsis:



So Christophe, is it actually possible to sell property in Bulgaria right now?

Yes, depends where – definitely in Sofia and Sunny Beach region and with sufficient time and marketing Varna and Golden Sands too. Bansko to a less extent, but occasional sales are still happening there. Sadly no movement in the ski resorts of Pamporovo or Borovets at all and likewise the rural inland areas too are almost static, the best advice for owners in these locations is to find a local agency, not an international firm like us.


We hear a lot of myths in the marketplace about Russians spending a lot and buying up everything available, is it true?

We hear these myths too, our favourite is that somehow Russians are all oligarchs and have millions to spend, that they will gladly overpay for property and are not so concerned with the price. The truth is quite different, the truth is that they are just like the British and Irish demand of previous years; they are middle class buyers with strict budgets all want the best property for the best price.

Occasionally we do get extremely wealthy clients with vast budgets, but they are buying vast properties with it and only pay the market rate. It is not true that Russians willingly overpay, this is a convenient rumour sponsored by agents who charge for advertising.


How are Russian buyers different to any others?

The biggest difference is that the Russians make lifestyle purchases, not investments. On the whole they are not interested in appreciation in value or rental income, they buy holiday home properties to use personally, they furnish and decorate them to their personal tastes and they use them for much of the summer. This is a really very different approach and will ultimately result in a much more sustainable market so its good for everyone. However, it means that a buyer must personally like your property to buy it, the rental yield and the future prospect of the area are largely irrelevant.


You mentioned companies who charge for advertising, is that particularly common?

First and foremost, NewEstate has no upfront fees at all, just like any regular agency we only get paid once we have done our job and found a buyer who actually pays. If we fail to sell a property there is nothing at all to pay. Secondly, our commissions are crystal clear, fixed and agreed in advance so there are no surprises.

Unfortunately there are many companies in this marketplace who are structured to only attract English speaking vendors and not Russian speaking buyers. They promise exaggerated values, which they use to bait owners, then the so called ‘agents’ claim to have access to secret pockets of mythical Russian buyers who will pay more for their properties, but then ask for a 500 Euros listing fee. Sadly this is their only business, they do not actually have any staff or offices in Bulgaria, they have no actual marketing in Russian, they simply pray on English speaking vendors who are in shock and disbelief at the true current values, then take advantage by charging an upfront fee. This is their only business and does not result in the sale of your property, it is a nasty scam really.


What advice have you got for owners who are wondering which agency to use?

If you thinking to sell your property and are wondering who to contact and give your business to, you should put yourself in the shoes of a buyer and assess your chances to sell with any given agency from that perspective. The Russians and those speaking Russian from the ex soviet block will typically search google.ru or Yandex which is Russian’s most popular search engine . Just like you and I they will perhaps type in ‘buy property in sunny beach’ for example, naturally this will be in Russian. NewEstate appears in the first page of results for such searches, we spend at least 10,000 euros / month ensuring that, but those who charge for advertising do not even have websites in Russian, they have no native Russian staff, no active marketing campaigns that buyers can find your property available on, as such listing with them will only expose your offer to fellow English speaking vendors who are seeking agents online in English, not buyers speaking Russian in Russia.


NewEstate has sold hundreds of properties in the past few years, some might say these have been sold for low prices, what is your reaction to that?

We get asked this a lot, especially by owners who bought in the boom years and have not considered the market since, they think about selling so contact us and hear the values of today, which can unfortunately be quite a shock. Like any business, we can only trade at the values the market decides; all our vendors can list their properties with us at any price they decide, we do of course guide them but ultimately it is up to them.

Fundamentally, our role as an agency is only to find offers from buyers in the marketplace and relay them to owners for their consideration, if the offer for cash in exchange for ownership is insufficient then they simply decline and we carry on marketing. Ultimately, the proof is in the pudding; if you have advertised for 1 year and had no offers, but see clear evidence that your agent is selling your neighbouring apartments, then the asking price is clearly the issue, not the marketing or the property. However, it is always the owner’s choice to stay steadfast and hold out for more, which is no problem at all for us, or to lower and entice offers.


Don’t some agents pressurise vendors to lower their asking prices?

The reality is that owners educate themselves on the true values, they do their own research on both us and the market, they decide what is professional advice and what is a sales pitch. I would like to profess that we are so big and so influential that we can somehow influence prices down and thus create excessive cheap stock that is easy for us to sell, but the reality is we’re not in that position and if we were we would have no stock left to sell, which as you can see from our website is not the case. We simply operate on the market level and go up and down in accordance with it, its macro scale economics and far bigger than us or any one agency. Perhaps we come across 2 or 3 vendors each year who contact us and say they desperately need to sell and must have the money in hand within a few weeks, in such situations they are not looking for the maximum market value and we can help connect them with serial investors who do buy such up under price property, but it is extremely rare and maybe true for just 1-2% of all annual sales.


How did you see the market changing looking to the future?

At the moment it is still very much a buyer’s market, there is no shortage of supply as the stream of vendors continues at a considerable pace. The sheer volume of new stock that continues to replenish the market does not encourage market prices to rise, there remains simply too much choice for the fewer number of active buyers.


So if I was looking to resell my property, how should I go about that?

My best advice is to first do lots of research before you contact an agency, try to avoid the hype and misleading information that is luring you to pay for advertising, read through all the news publications and independent sources to see what is really going on in the market. Ignore asking prices, these are often set by owners who have paid for an advert and have no connection to the actual market, you can advertise ?10 note for ?15 with all the marketing in the world, but no one is going to buy it, as such you must look for sale prices only, check the real data. If the agency you are consulting cannot provide you with clear definitive sales data then it’s the first sign they either don’t sell anything at all or very little, either way they are best avoided.

Speak with the agency, make a judgement of their knowledge and competence, if they are uncomfortable with a lot of questions then keep looking for those who are not, there are many professional companies in this market and 30 minutes of Google will present them all to you. Feel free to list with several agencies, but be aware that you will never be their priority if you do; if your agent is good and they know that your property is only listed with them, they will invest extra into getting it sold. Sometimes it costs us 5 Euros / click on Google, so we can spend half our commission before find you a buyer, if we know it will be returned to us then we will naturally be more willing to invest more of our money into getting it sold for you

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Unfounded rumours in the market generated by unscrupulous agencies suggest that the Chinese are buying in Bulgaria – all to get you to pay them for advertising – don’t fall for it.

chinese-charactersAs part of our efforts to accurately relay information from the marketplace, we can wholeheartedly confirm that there are no signs of increased buying interest from China. Having spoken with both notaries (who oversee every single property transaction) in the whole region of Sunny Beach, they have confirmed that of the 7,000 transactions last year, possibly 5 sales (0.07%) involved transactions with Chinese passport holders and this year has been no different. This represents no greater volume than any other particular nation.


As much as we would like to see a new wave of interest in Bulgarian property coming from a new country, sadly this looks to be yet another scam structured by ‘agencies’ who charge for listing properties rather than actually selling them. Many such agencies have been increasingly confronted in the media and within the industry to explain why they charge without selling and what they actually do in return for their fee. Seemingly, the response to this has been to pretend that they are suddenly active in a new niche market, which is actually fictitious, to justify their charges and further convince vendors of their worth.


In reality, the so called ‘agencies’ could advertise on the moon in martian, but there are currently no buyers there for Bulgarian properties either, if there were they would not need to charge you upfront and would simply collect a fee upon completing the task.


Vendors beware: any advanced charge should be taken as the first sign of an agent’s lack of ability to sell your property. If they feel they can actually sell it, then let them do their work first and then get paid second, just like any other type of job.


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Tips and advice for selling property in Bulgaria

for saleSelling property overseas is undoubtedly a complicated task; one cannot simply walk into the nearest estate agent and put the property on the market, when it comes to selling in Bulgaria it is even more complicated. The property market completely crashed and the vast majority of agents who you encountered when buying are unlikely to still be in business. Furthermore, the ordinary terms of business such as percentage of agency commission fees, when they are paid and by whom, duration and costs of the convincing process etc , are more or less established variables at home often remain a murky question mark in Bulgaria.

Here are some tips that we hope will help you when it comes to dealing with Estate Agents in Bulgaria.

1.       Location of your property.

If your property is located in one of the larger big cities such as Sofia, Varna Plovdiv or Bourgas you will need to look for an agent who is active in the domestic market as the demand for urban properties is purely from the local, residential and domestic buyers.  In such areas, the agent most likely to find you a buyer will probably be locally established and possibly part a franchise chain with nationwide presence.

If you own a property in the holiday areas such as Sunny beach, Golden Sands, Ravda, St Vlas, Bansko, Pamporovo and so on then your best bet is to go for an agency who is marketing actively in Russia. It is hardly a surprise that almost 80% of the deals in the holiday areas are currently with Russian buyers.


-if selling holiday property make sure that your agent have a real marketing capabilities in Russia / Russian speaking staff, regular presence in Russian property exhibitions, Russian website, Russian phone number, online campaigns that feature in the search results of Russian portals and search engines (not in English or just appearing in .co.uk or .ie search engines)   and Russian printed promotional materials.

-if selling property in the bigger cities make sure your agent is well established in the domestic market and has a presence in Bulgarian, with Bulgarian website, real staff on the ground capable of doing viewings and selling your property to local buyers,  advertising in local portals such as imoti.net of homes.bg etc.

2.Commission fees

In effect, the Bulgarian estate agents operate in the same way as the agents in UK; commission is paid by the vendor when the sale completes. The commission is always agreed before putting the property on the market.


- Never pay any commission fees up front.

- Always agree the commission in advance

-don’t ask for set amount that you want to receive in your pocket and allow agents to put their commission on top. This way you will allow the agents to speculate with your property and yuo might receive less than what is actually achievable, or enable them to play with the marketing for much longer to potentially get themselves a higher return and you the same amount of money but many months or years later.


3. Amount of the commission fees

The agencies that sell city properties on the domestic market normally charge vendors 3% of the selling price, in unusual circumstances the commission can go up to 4% or can be as little as 2%. For the agents who work with holiday properties the usual commission is 10%. Some agencies are also working on flat commissions. The explanation about the higher fees for holiday properties is the higher international marketing expense and the large overheads to span the various markets that are beyond Bulgaria where the vendors (UK, Ireland) and the buyers (Russia, ex-soviet states) typically come from. Advertising in Russian, employing Russian speaking staff, offices or partner agents in Moscow does not come cheaply, likewise every time your property is clicked on in Google it can cost the advertising agent up to 5 Euros / click.


-do not agree on higher commission then the amounts mentioned above.

-be skeptical about agents that offer to sell your property for lower fees.


4. Selling process and Conveyancing

Again the process here is not very different from the process in UK. A property deal in Bulgaria starts with the collection of deposit, after the buyers pay the deposit to the agent the property is taken off the market, then the conveyancing begins. The amount of deposit varies but is usually between 5% and 10% of the selling price. After that the buyer needs to prepare a set of documents necessary for the completion of the deal.


-make sure that your agent knows the process of conveyancing very well.

-make sure that your agent has the necessary capacity to start and finish the whole process. It is common for deals to fall apart due to badly trained agents or incompetent agencies with insufficient knowledge or local staff.

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Latest Property Market Data of the Bulgartian National Statistic Institute.Prices continue to fall.

The table below is showing the official statistical data of the Bulgarian Statistical Institute for the dynamics of the price of apartments in the District Centers in Bulgaria. The calculations are based on data provided by the property registry agency/bulgarian version of land registry/.

The data confirms the predictions of further decrease of the properties published by New Estate Bulgaria and reflects the continuing depression of the property market.

According to New Estate Bulgaria the Bulgarian property market fundamentals still do not suggest a forthcoming upturn. The demand is still week and the inventory continues to increase with new lsitings  offered mainly by property investors who invested in the boom time between 2005-1008 and now decide that it is time to move on and sell even at lose. However, some slow down in the speed of the decrease is noticed. This might be a sign that reaching the bottom of the pirces is close.

Average property prices in EUR per sq, m

NSI data for property prices


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Bulgarian Property Prices 2012 – Time to stay or sell?

Bulgarian property prices fell again by 2.6% on an annual basis according to the second quarter results for 2012, according to the latest report from.Global House Price Index from Knight Frank consultancy. In total the performance of property markets in 54 countries is compared, of which Bulgaria is currently ranking at 39 position.
The index suggest that between the second quarter of 2011 and second quarter 2012 Bulgaria is one of 23 countries that registered a decrease. However, this decrease in value has decelerated considerably, although there are no suggestions of its stopping or for growth to be likely soon.
Each of Bulgaria’s 27 property districts saw decreases from the start of 2012; the average price of residentialproperty in September 2012 was 452 Euros / sqm, as estimated by the National Statistics Institute. The highest value of properties per sqm were in Sofia (730 Euros /sqm), Varna (725 Euros /sqm) and Bourgas (582 Euros /sqm). Ireland again leads the European chats for decrease in property values, with house prices falling by an average of 14.4% on an annual basis in 2012. Hungary (11.2% decrease) and Greece (11.3% decrease) follow close behind.
Low prices continue to attract Russian buyers of Bulgarian property who purchase as a lifestyle choice, not for investment. Meanwhile, those looking to sell Bulgarian property continue to be largely British, Irish and now an increase volume of Polish vendors, most of whom purchased for investment based reasons and are now retracting from the market in huge waves.
Recent report by HiFX suggests that Brits are again buying abroad, but focussed on the classic destinations of rural France and coastal Spain. A smaller minority of purchasers are active in Italy, Cyprus and Portugal where distressed prices offer considerably cheaper alternatives. Swiss mountain resorts remains the solid choice for those with higher budgets and demands for world class quality over price. Unfortunately, all previously ‘emerging destinations’ such as Bulgaria, Romania, Cape Verde are no longer of any interest to the British and Irish buyers, with more than 95% of Bulgarian holiday properties selling to buyers from Russian / ex-Soviet states.

Source: www.newestatebg.com – leading property agents in Bulgaria


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Volume of finished apartment properties in Bulgaria drops in 2011 by 11.15%

According to the data published by the National Statistics Institute, the number of the apartments issued with a final usage permit (Act 16) in 2010 was 15,717, yet in 2011 it was 14,012 showing a 11.15% decrease. Most apartments were completed in Bourgas (3,720 units) followed by Varna (2,732 units) and Sofia just (946 units). The region of least activity in the new build property sector was Vidin where only 73 units were completed.

Previous data from 2009-10 showed a drop of 35% as the recession took hold and severally impacted the construction industry. However, it is still thought that not less than 2/3 of the apartments finished in 2011 resulted from delayed projects from the pre-recession property boom era.


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NewEstate Launches 100,000 Euro Marketing Campaign in the Russian Market for the Sale of Bulgarian Properties

n 1st March 2012, NewEstate launched a new and extensive Russian marketing campaign ahead of the summer season to bolster its presences and further assert its dominance in the marketplace. Since the launch an average of one property per day has been sold, some threefold increase on usual trading for this time of year. Director, Christophe Gater, commented that this ‘demonstrates a strategic success in conquering online marketing in the Russian market’, he explained that ’12 months ago we were page 85 on google.ru today we are page 1 for our chosen search terms’. Whilst NewEstate chose not to explain how they have done it, it is clear to all that they have made it happen in a tough and competitive market.

It is obvious that heavy investment has been needed to reach this milestone, but the investment appears to be set to reap considerable rewards as previously unsellable stock becomes more visible to those active Russian buyers. Whilst the marketplace as a whole shows few signs of price increases or higher sales volumes, this is a certain success for the vendors who have listed with NewEstate as they are far more likely to sell Bulgarian property as a result of this strategic investment.

NewEstate maintains a ‘no sale, no fee’ policy and insists that it will never charge upfront fees for representing and marketing. Christophe Gater commented ‘marketing is entirely our cost and our risk, that is why we are in business and able to offer a service. Our investment and success justifies commission upon selling; charging upfront fees is a nasty scam and I look forward to these unprofessional people being pushed out the market’.


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Price of Bulgarian Holiday Property hits new low.

Whilst there are good signs that Russian demand remains steady, with indications of increase, the real catalyst continues to be the ever dropping prices of property offered by British and Irish vendors. Speculative reports suggesting that ‘market recovery has begun are overly optimistic’ says NewEstate, a professional Bulgarian property consultancy.  It is misleading to think that because more Russians want to buy cheaper property that Bulgarian property will suddenly become more expensive, the demand pattern is entirely down to the price and truly disconnected from the raw value of land, rental returns or profit from property investment etc. Much like the Christmas sales, people will buy more when stock is available ‘cheap’, when the price goes back up the demand slows and normal spending returns. Pockets of Bulgaria’s holiday property market are in such a ‘sale’ right now, with British and Irish owners controlling the ever lowering prices as they fight each other for sales, the trouble is that it is on a macro scale and could last years rather than seasons.


In this buyer’s market, it is apparent that the wide spectrum of Russian property media concurrently and heavily promoting the availability of Sunny Beach region property at entry prices; studios at 10-15,000 Euros, one bedroom apartments at 25,000 Euros and two bedrooms from 35,000 Euros. As with any marketing, it only exists to have a commercial impact, in this case and at these prices the result are floods of individual enquiries all amassing to collectively and repeatedly ask for property options only at these levels. Agencies relay the demand patterns to the British and Irish vendors and as with any market where supply is bigger than demand only the lowest priced vendor wins. In this market, this lowest bid has become lower than 6 months ago, simply put apartments sold 12 months ago in early 2011 could not achieve the same values today.


Bulgarian property market shifts show that 80% of property transactions are now below 40,000 Euros. Anything grand, impressive or more expensive will be within the minority of deals above 55,000 Euros, which is seemingly the revised ceiling price for ‘bigger spenders’.  Above 55,000-60,000 Euros the chances of selling are unfortunately minimal, even if your property is worth that much by todays’ lower rates it nominal value puts your property into the scope of less than 15% of buyer’s affordability.

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