PRICES IN RESORTS BEGAN MOVING DOWNWARDS
Prices of real estates in seaside resorts dropped by some 30% due to oversupply and excessive construction, branch experts comment. And while Englishmen have long ago given up buying holiday property in Bulgaria and our countrymen have directed their attention to neighbouring Greece, Russian seem to have remained on the domestic real estate market in our resorts.
Around 90% of the clients in this country are Russian buyers and are among the few reasons for investors' optimism, the GreenLife company comments, which is one of the main players on this market. Despite some analysts' expectations that purchases on the part of Bulgarian citizens will increase, our countrymen are still not a factor on the holiday properties market. According to GreenLife, a comparatively small percentage of local people could afford such expenses, and most of them prefer to buy a second home in Greece. Our southern neighbour is attractive due to the better ratio between price and location and the much better transport infrastructure which allows Sofia's residents to reach more quickly than Sozopol, on the southern Black Sea coast.
According to brokers, the British who have closed deals two years ago, are happy because they have already made a profit exceeding 40 per cent. Unlike them, those who purchased real estates in 2007 are disappointed from their returns and a seeking ways to get rid of them because their incomes from renting the properties during the past summer didn't meet their expectations. The rate of return were in the range of 3% to 5% in 2008, down from the expected almost 10% and vs 7% in 2007, GreenLife data show.
The biggest losses will be those of investors who have not made greenfield sales, hoping to get higher prices for already built real estates. Supply is currently far above demand and the huge concrete buildings along the seaside are empty with a few exceptions. Nevertheless, many owners still maintain selling high prices. In Sozopol, for instance, real estates have appreciated this year and are presently offered at EUR950-2,200/sq. m. The situation in Bansko and Pamporovo is somewhat different where the average prices have dropped by some EUR100-200/sq. m.