Current supply and demand:
It is widely reported and commonly accepted that the vast majority of purchasing demand comes from Russia and ex-Soviet states such as Armenia and Ukraine, while suppliers are largely from the UK and Ireland. In our experience there are very few sales for Bulgarian developers/sellers at the moment and as such the market is now dominated by international resale rather than ‘new/off plan’ properties. While prices are down as much as 50-60% from their peak, buying trends now are much different than before and this likely explains why a property is or is not selling at the moment.
The change in demand by location:
Despite the great effort and great marketing expenses, there is currently a minimal level of demand for properties in the center of Sunny Beach; Less than 8 out of 100 inquiries request apartments in the main built area. Although this covers a considerable range of quality and complex types, the overwhelming truth is that Russian demand is rarely interested in buying there. Much more common is the request for beachfront properties, or at least those with ocean views in the quieter, lower-density, and more family-oriented areas. St Vlas, Nessebar and Ravda are the repeatedly sought after locations where good properties can once again be considered as liquid assets (when available at market price). Areas like Pomorie, Aheloy, and Sarafovo lag noticeably further behind, but still ahead of downtown Sunny Beach.
We have seen property price stabilization which is in line with current demand, ie St Vlas marina side properties for 600 euros/m2 while those in central Sunny Beach attract no attention at 450 euros/m2, so prices continue to fall and availability in that area increases. it is unavoidable.
Russian buyers have different motives, cultural traits, and desires:
Since almost all of the providers are from the UK and Ireland, they share many core cultural norms. Most were driven by the same key motives to buy cheap in a supposedly emerging market for investment purposes, to make money on rental income, and to achieve growth in value. As such, purchasing decisions were made based on the fiscal aspects of the property as a priority rather than aesthetic appeal, views, comfort, longevity, quality, etc. Very few owners actually use their properties, many have never seen them.
Russian demand is naturally willing to always pay the best price, there is no doubt that the middle market served by Bulgaria is far from the rumors of oligarchs and billionaires; the average budgets are 35,000 -55,000 euros and rarely more. These buyers are rarely interested in potential future rental income, growth, or value; almost all Russian buyers are buying a lifestyle product to use and treat as a second home and never solely as an investment. This means that the specific property has to meet the buyer’s personal requirements, wishes and tastes and that this always comes before cost. While price, rental income and expected growth are relatively easy to pop into a spreadsheet, compare and sell (which largely shaped the selling process to the British and Irish), it’s not the same methodology. for the russians. Blind buying does not exist, almost everyone comes to see and many come several times before finding what they are looking for. This increases the cost of sale and means that any property is likely to be viewed many times before it finds a new owner willing to pay for it.
Beyond these properties being second homes, Russian demand often sees such an acquisition as future family security. Often regarded as a gateway to life within the European Union, Bulgaria not only offers a nearly understandable language, affordable property, similar culture and sunshine, but also offers extended visa rights to those who own property and therefore therefore, prolonged time within the EU. Our experience shows that almost all buyers are also looking to achieve full time residence, many proceed and attempt to achieve a ‘right to reside’ despite the expense, in many cases it can be 10% of the property value per person.
Almost all Russian queries specify ‘neither ground floor nor upper floor’. Although many homeowners have paid high prices for penthouse views, the reality is that top-floor locations are a hard sell to Russians (and Bulgarians alike) as they are not as desirable and are worth less depending on their tastes. While Brits typically find Victorian lofts and upper-floor locations appealing, generations of Russian communist-style blocks with notoriously leaky roofs, damp ceilings, and unkempt intrusives have been a catalyst for the opposite view. The result is that top-floor properties often sell for less, much to the dismay of current owners. The ground floor is a similar story and while it is generally acceptable for most tourists for a week, Russian owners buy to spend 3-6 months at a time and therefore often discard the ground floor immediately.
The enormity of the buyer’s market that is the Bulgarian Black Sea right now means that no matter how particular a buyer’s demands and requirements are, they are sure to have multiple options, a healthy choice and a competitive selection at low prices. Unfortunately, this is the reality of the market at the moment for those wishing to sell a Bulgarian property.
Your opinion about your property is irrelevant, the buyer is always right:
The vast majority of listed properties are advertised at a price chosen by the owner. In many cases, this is because the agency only sells advertising space and not real estate, so the price is whatever satisfies the owner; in other cases, the price is set according to ‘what the property owes’ to the owner. Neither has any connection to the reality of the actual achievable sales price, both are determined by personal desires rather than actual demand and market forces. The result is a vast ocean of overpriced listings that never sell and only serve to confuse new owners who hit the market and use them for comparison.
It’s worth keeping in mind that any ads/websites you may see in English are only there to attract more British and Irish sellers, not Russian buyers. Don’t be fooled by the self advertised prices, certainly no agent is investing his own money to market his property in Russia if it is not at true market price, what would be the point.
Many sellers make the mistake of considering their property from their own point of view with the bias of believing that it was their best option at the time of purchase, so someone else must agree and pay for it. A fair point of view if you are assimilated to the potential buyers of your property, but unfortunately when the demand comes from a very different culture, you buy for very opposite reasons with very different motives and therefore so are your tastes and the subsequent ownership elections. The obvious truth is that personal property opinions matter (as far as sales go) when deciding which property to buy, however, as an owner and seller, these opinions are irrelevant and outweighed by today’s spenders.
