No More "Little Russia" on the Black Sea Coast: Young Bulgarians and Retired Europeans Return to Buy Properties

Business » PROPERTIES | July 5, 2024, Friday // 10:22
Bulgaria: No More "Little Russia" on the Black Sea Coast: Young Bulgarians and Retired Europeans Return to Buy Properties

The holiday property market along Bulgaria's Black Sea coast is experiencing a shift away from its previous dominance by Russian buyers, now attracting a blend of younger Bulgarian professionals and retired Europeans. According to a comprehensive report by BTA, half of the buyers for seaside apartments are Bulgarians under 30, primarily from the IT sector, while the other half consists of retirees from Germany, France, Italy, and the Netherlands.

Demand is particularly strong for two-bedroom apartments within gated complexes, with average prices starting at 1,900 euros per square meter. Maintenance fees, which cover amenities like pools and gyms, no longer deter buyers, who typically spend around BGN 60-70 per month on these services. Ukrainian investors are also entering the market, focusing on new residential developments near the sea.

This snapshot of the summer holiday market in Bulgaria was detailed by Atanas Argirov and Stefka Kalcheva, members of the National Association "Real Estate" Management Board.

In Varna, residential property prices have surged by 60 percent over the past two years, prompting a shift in buyer interest towards vacation homes. Atanas Argirov notes that holiday property prices have also risen, albeit more slowly, by 25 percent during the same period, indicating a stable upward trajectory despite lagging behind residential real estate.

The preferred locations in Varna include areas around the city center like "Sts. Constantine and Helena" and its surrounding districts. These locales, increasingly structured as residential hubs, appeal due to proximity to amenities such as large supermarkets and easy access to Varna and Vinitsa districts. The trend shows an almost equal number of permanent residents and vacation property owners in these areas.

In Golden Sands, demand for vacation properties is also on the rise, particularly within closed aparthotel complexes used mainly as second homes rented out during the summer season. Despite limited year-round inhabitation, interest remains high, with several new residential projects underway in "Sts. Constantine and Helena" and ongoing development in the Golden Sands area.

Buyers in Varna predominantly favor two-bedroom apartments, which account for about 40 percent of all real estate transactions in the city. Larger units with more than three rooms are preferred by IT professionals, who utilize them not just as residences but also as workspaces, reflecting a growing trend towards multifunctional living spaces. Security and amenities in gated communities attract over 80 percent of buyers, with rising maintenance fees posing minimal deterrent.

Approximately 60 percent of new buyers in Varna and its surrounding resorts are aged between 25 and 35, many of whom work in the IT sector. Bulgarians make up the majority of purchasers, while retirees from Western Europe constitute a smaller yet significant demographic, alongside buyers from Ukraine and Israel. The departure of Russian buyers has led to a smaller foreign presence in Bulgaria's real estate market, with Ukrainian investors beginning to play a more prominent role, particularly in high-end developments near Alen Mak and Manastirski Rid.

In the Burgas region, interest in vacation properties is steadily growing, with Bulgarian citizens accounting for 50 percent of transactions. The remainder includes retirees from Germany and a diverse mix of buyers from Poland, the Czech Republic, Israel, and Russian-speaking countries. This influx has partially offset the decline in Russian buyers, who face logistical challenges in utilizing their Bulgarian properties due to visa and transport restrictions.

Property prices in Burgas have seen a modest increase of approximately 5 to 6 percent since the beginning of the year, aligning with inflation rates. Despite a balanced market without significant peaks, industry experts predict a slight rise of 2-3 percent in housing prices by year-end, totaling an increase of 4-8 percent for 2024.

Sozopol, Nessebar, Sunny Beach, and Primorsko remain favored destinations for vacation property investments, with a growing interest from Ukrainian buyers in Pomorie. The profile of buyers in Burgas skews towards younger Bulgarians aged 35-45 seeking second homes, while foreign buyers, particularly from Poland, are also prevalent. Financing through mortgage loans is common, with expatriate Bulgarians and EU residents contributing to a significant portion of purchases.

In both Varna and Burgas, two-bedroom apartments are the preferred property type among buyers, offering flexibility for seasonal use. The appeal of closed complexes lies in their security and maintained amenities, with additional fees, including maintenance costs, posing minimal concern for new buyers. Prices are influenced by proximity to the sea, with properties closer to the beach commanding higher values. However, affordability remains a consideration, with lower-priced options reflecting their distance from coastal areas and historical town centers.

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Tags: market, property, Russian, Bulgarian

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