A mix of an economic slow-down, overconstruction, debts and fewer tourists has carved out a new niche on Bulgaria's stalemated real estate market – hotel sales, according to the head of a major real estate agency.

“Most hoteliers did not manage to cope with the difficulties that they faced with the onset of the crisis. The sharp drop in tourists, prices and turnover made it impossible for them to cover their debts,” Dobromir Ganev, CEO of Foros real estate agency, said in an interview for Novinite.com.

According to him the second factor, which brought about the increase in the number of hotels for sale in Bulgaria is the overconstruction that the coastal and winter resorts witnessed as a result of the huge investments poured into the construction of hotels over the last five years.

Just two years ago Bulgaria, a confident European Union new member, was celebrated as a property hotspot with healthy growth in all segments. These days frozen projects and bankrupt investors paint a gloomy picture and there is growing alarm that the big boom has become the big bust.

The owners of hotels in the coastal and mountain resorts know that best. Following a weak winter season and an anemic summer season, they have been forced to put up “For Sale” notices, but buyers are difficult to find.

Experts say this is not the burst of a speculative bubble, but rather the logical development of the market. The foreign buyers, who fueled the real estate sector in Bulgaria, started to withdraw in 2008 due to the slow-down in markets outside Bulgaria, finding it harder and harder to finance their purchases. Those who bought a property in Bulgaria, hotels in particular, now often find it difficult to serve the credits they used.

Data of Foros real estate agency shows that supply of properties for sale is abundant on the Southern Black Sea coast, particularly at the resorts of Sveti Vlas, Sunny Beach, Ravda, Nessebar, which account for 45% of all offers of hotels for sale.

The majority of hotels offered for sale at the moment are completely furnished, spread over 900 square meters and offer 20-25 rooms. The average sale price for this type of hotel is EUR 500,000 or EUR 550-650 per square meter.

These hotels are located on the periphery of the sea resorts or can be small family hotels, in which case the price can be negotiated down to EUR 350-450 per square meter.

FULL text of the interview with Foros agency CEO READ HERE

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