Russians drive Bulgaria's Black Sea coast property market
Almost all of the deals for Black Sea coastal properties in the first half of this year involved Russian buyers, according to analysis by the real estate company Bulgarian Properties. Brokers and real estate officials believe the reason for this trend is the weak euro and low property prices.
Russians' interest in Bulgaria in particular has to do with the strong cultural ties and easy integration due to the similarities between the languages.
In the past five years, over 150,000 Russians have purchased apartments or houses in Bulgaria, which accounts for an investment worth more than 695m euros. Most of these buyers are middle-class families from Moscow and St Petersburg.
The boom in Russian property buyers replaces English and Irish buyers, who flooded the Black Sea and mountain resort areas during the property peak in 2006-2008. Terziev, a real estate consultant in the southern coastal town of Tzarevo, said English and Irish buyers are currently selling to Russians. Unlike the English and Irish, Russians don't rely on credit to buy property; they come with cash.
Currently, the profit margin is between 15% and 30%, which is quite normal, suggesting that the market is gradually beginning to regulate itself.
A study by Bulgarian Properties found that prices in the first half of the year have dropped by 5%, compared to a slide of 10% in 2010. Another positive signal is the significant increase in the number of deals, which was up 50%.