A Rural House – Something Everyone Can Afford

Lilly Granitska, Capital Weekly, vol.15, 18.04.09

I want to buy a house near the town of Plovdiv, about 30-40 km from it, in a nice village. We don’t need a big house but we want it to have a yard and to be massive. If possible to be made of bricks, with electricity, running water, a bathroom and a lavatory. It must be in a good condition, without need of renovation, may be in need of only some minor work. It should be ready to live in. Price – up to 16,000 BGN.

This is only one of the many ads which can be found on the internet of late. It is not only foreigners that have found the advantages of the nice rural house but Bulgarians have done so as well as currently they are the main buyers on the stagnated market. The crisis is about to stop the process of mass migration from the smaller settlements to the big cities and to change its direction. The reason for that can be found in the advantages the rural house offers.

What is better than to buy a brick house with a big yard and parking space in a tranquil environment escaping the block jungle and dirty city air, comments Nikolay Mirchev, owner of the Dobrich-based AVE Facta property agency. To that one also must add the almost half price of the rural house compared to the prices in the city close by. These are one type of buyers. The other type are those who do not feel comfortable in the over-constructed resorts and want to be closer to nature and to tranquility as it is something everyone can afford, says Polina Stoykova, Chief Operations Manager of real estate agency Bulgarian Properties. According to her since last year it is not only those living in the capital Sofia that spend their holidays in the rural countryside but more and more people from around the country. To the increased interest towards rural properties we must also add the decrease in their prices which is over 35% year-on-year. Last year the deals were concluded at an average price of 30,800 Euro while this year the average price is 19,890 Euro, the data of Bulgarian Properties show.

The ”Hot” Villages

The interest of the potential buyers who want to buy a rural property in Bulgaria continues to be focused mainly on properties around the capital Sofia, Plovdiv, Stara Zagora and on the other big cities, including those close to the seaside – Varna, Bourgas and Dobrich and those close to mountain areas – Veliko Tarnovo, Gabrovo and Gotse Delchev. Foreign buyers are also interested in properties around the towns of Vidin, Elhovo and Montana and lately in rural properties around the town of Pleven where prices are quite lucrative. There is also interest, mainly for investment purposes, in the villages around the town of Belene due to the construction of the second nuclear power plant. Regarding Plovdiv region there is great interest towards the properties in the village of Markovo but the houses there are expensive. The new places of preference are the villages of Kouklen, Staro Zhelezare and Chernichevo.

The Buyers

Bulgarians and foreigners are the main groups of buyers but they have different preferences when it comes to rural properties. Part of the Bulgarians look for rural houses up to 20 km from the big cities to live there permanently. We should put these properties in the residential rural category and not in the holiday home one, Polina Stoykova comments. These buyers are usually families with children looking for calmness and closeness to nature but also for easy access to the big city where they work. Another trend among Bulgarian buyers is to buy a rural property not close to the city where they work but close to the seaside or in the mountain. They seek regulated plots of land in the villages on which to build a house as per their requirements. On the one hand, the investment in a plot of land means a smaller budget and on the other, the construction of the house can wait as in the meantime the buyer won’t have to worry about managing the property. And then one day the owner will have the house of their dreams instead of having to renovate the old house they bought, points out the advantages Polina Stoykova.

For now the problem on the rural property market is that despite the high demand the positions of the buyers and the sellers still can’t meet, Mr. Mirchev comments. Bulgarians are ready to pay between 10,000 and 15,000 Euro for a house around the big cities, the data of Bulgarian Properties show.

Meanwhile, sellers maintain high prices especially in the regions of Plovdiv and Veliko Tarnovo and at this point they are not ready to make discounts, comments Nikolay Pehlivanov, owner of Green Life which also invests in holiday homes. This is also the reason why it is difficult to conclude deals, comment the participants in this market segment. At the same time there are offers for houses that cost 1,000 – 2,000 BGN which are not in a bad condition but are located in villages far from the big cities (50-100 km), have bad roads and almost no infrastructure, Mr. Mirchev adds.

In contrast to Bulgarian buyers foreigners see smaller and more secluded villages as an advantage and therefore buy cheap houses. They are interested in settlements that have preserved the spirit of times past when people led a natural and calm life. They prefer bigger yards – over 2,000 sq.m. and in contrast to Bulgarians for them the house is not the main advantage. In most cases foreign buyers are middle-aged and before retirement, with grown up children or are pensioners. They want to buy a holiday rural property where they would stay a few months a year. However, some of them move to Bulgaria permanently and even want to take part in elections. This is usually prompted by the high cost of living in their countries and the constant insecurity, especially now in the conditions of a financial crisis.

The other type of foreigners are the investors. They buy old rural houses at low prices up to 10,000 BGN after which they renovate them. Then they sell them at a very good price to other foreigners and even to Bulgarians. However, these sellers are very aggressive, flexible during negotiations with potential buyers and are willing to make discounts, Mr. Pehlivanov adds. The data of Bulgarian Properties show that 30 percent of the deals are concluded with Brits – mainly deals with cheap rural properties. The other buyers are of various nationalities - Russians, Danish, French, Swedish, Dutch, Norwegians, etc. According to local agencies in the area of Vidin there are properties bought by New Zealanders, mainly in the villages set along the river Danube, but these deals are very few.

Holiday Developments

Some time ago the demand for holiday properties was focused mainly along the Black Sea coast and in the mountain areas and the result is known to everyone – over-construction and excess of supply, comments Yoav Shenhar, manager of the Bulgarian office of Tidhar Group.

According to him this will direct the holiday home business towards the interior of the country and towards smaller projects. The business logic behind this is that with these projects there is no problem with the oversaturation of the market and of the built-up area. Besides, they are ecologically friendly and take into consideration personal space. Rural holiday projects do not bring fast profits to the investors. In this sense only the serious investors will remain on the market, comments Mr. Shenhar.

The Israeli Group is in the process of realizing such a project in Arbanassi. It is planned as an ethnographic holiday development. The first phase will include 42 houses and the second – 28 more. Currently the project is in the phase of drawing up the construction permit documents as the permit is expected to be received at the end of the year. After that will start the preparation for the construction of the development.

The only rural holiday development which is at its finishing works phase is the Gesha View complex in Dryanovo, Bulgarian Properties agency says. The other projects which periodically appear as offers are mainly on paper and it is not sure whether they will be realized at all.

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