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Russian interest in Bulgarian property market grows

Tuesday, Sep 09, 2008

There are times when the "Russian invasion" could be a pleasant surprise. When speaking of investments and buying property in Bulgaria, that is.
Russian buyers seem to be the new hope of property developers after the tide of British and Irish clients has begun significantly to subside since last year.
According to a survey by Green Life Property Development, as cited by Stroitelstvo Gradut weekly, a steadily increasing number of Russian, Scandinavian and Romanian buyers has come as a satisfying substitute, with Russian-speaking clients making up to 90 per cent of all buyers.
The investment company noted that there are two groups of emerging on the Bulgaria’s property market. One is of wealthy Russians coming from Moscow and Saint Petersburg, who seek to purchase spacious flats with the intention to use them as holiday homes and not let them for profit. The other group of buyers, not as solvent, prefers to buy smaller homes as an investment.
Green Life’s survey indicated that the latter group comes to replace British clients who often bought several flats off plan and later tried to re-sell them to their fellow countrymen for a profit.
However, most Brits who have bought property two years ago are pretty happy with their investment return that accounts for 40 per cent of the initial price. On the other side, people who have bought real estate last year are left rather disappointed.
Pressed by mortgage payments for a first home, in addition to unsatisfactory three to five per cent as opposed to the expected 10 per cent returns for the last holiday season, most buyers are looking for ways to rid themselves of the property, according to Green Life.
The withdrawal of potential British and Irish clients puts many developers seeking quick profits in unfavorable position, but the tendency will help the property market to regulate itself. Only the most reliable investors with a clear business strategy will be able to stay afloat in the midst of advancing property market crisis, Stroitelstvo Gradut has quoted Green Life’s CEO Nikolai Pehlivanov as saying.

Source: PropertyWise Bulgaria