Bulgarian Properties Ltd. in the news. Interview with M. Chobanov.

British and Irish people buy houses in Bulgaria because of the low prices and the beautiful nature
In three years time, the average prices of the apartments in Sofia will probably reach 1000 – 1200 Euro/sq.m and will reach those in Prague, Budapest and Warsaw, says Mihail Chobanov, owner of Bulgarian Properties Ltd.

Mihail Chobanov is 29 years old. He graduated the Mathematical class of the Elhovo High School and studied Law at the University of Bourgas. In 2003 Chobanov registered “Bulgarian Properties” Ltd. – Sofia, an agency specialized in the sale of real estate properties to foreigners.
Foreigners still are not allowed to buy land in Bulgaria. This obstacle, however, can be eluded if the foreigner registers a company and in buy the property as a juridical person. The expected change in the constitution will most probably abrogate these restrictions. At the end of the last week was announced that foreigners will soon be able to purchase realties close to national security areas without the previously required special licenses. Members of the Parliament Economic Commission voted down on second reading the text according to which the foreigners had to ask the Ministry of Defense and the Ministry of Internal Affairs for such a license in order to purchase real estate properties close to national security objects.

Q: How did you decide to register the Real Estate Agency “Bulgarian Properties” Ltd.?
A:In 1997 I went in Great Britain for a first time as a student and there in discussion with a friend, we came to the idea to settle such company. In Britain we met many interesting people and made a lot of useful contacts. So, we decided to establish such a company in Bulgaria and draw the attention of British people into Bulgaria. “Bulgarian Properties” Ltd. was settled in 2003 and now has agencies in Great Britain, Ireland and Malta with new agencies to be open in other countries. We also try to reinvest in advertising, for which we have the support of our partners and friends in Great Britain. Our aim is to ensure effective juridical and business services for our international clients, which want to start business, to invest or just to buy property in Bulgaria. Our first deal was a year and a half ago in Bansko. An English businessman bought a house - new construction plus completion works, for which he paid 100 000 USD.

Q: Foreigners invest their money in real estate properties in Bulgaria. Is this the right moment?
A: Definitely. The prices in Bulgaria are low and this is one of the reasons foreigners want to buy estate properties here. Despite, British people like our country and are fascinated by the climate. It may sound strange to you, but I think British people have the same mentality as we have – they are cheerful, like to have fun and this attracts them to the Bulgarians. Almost all of our clients, who have been here “fall in love” with their Bulgarian friends. Despite the linguistic barrier, they somehow get into contact. English people are impressed by the politeness and hospitality of the Bulgarians. That is why we have several cases of entire families with children who settle here forever.

Q: For a short period of time, your company became a symbol for successful real estate deals with foreigners in the region of Elhovo. Why Granitovo?
A: My parents come from this region. When we started the company, for a period of 6-7 months I invested a lot of time and money to advertise this region. We organized seminars in the UK, took part in real estate properties seminars, invested in Internet advertising and British media like newspapers and magazines. I wanted to popularize Granitovo due to sentimental reasons. The region is far from any harmful productions and we have put a stress on this fact. When foreigners visit this place they find quietness, peace and possibility for relaxation among magnificent nature.

Q: People talk about British village in Granitovo…
A: The British village in Granitovo is already a fact. There are two families with small children, who wait the completion of the finishing works to settle here for good. We have written to the Ministry of Education and asked for a special program aiming at the affiliation of such children. Our youngest clients are 27 year old, who bought a house in the village of Drjanovo, municipality of Tundja. They intend to settle here in late spring. However, our deals include houses not only in Granitovo, but also in the villages of the municipalities Tundja, Bolyarovo and Topolovgrad.
Our lowest sale-trade till that moment was for 1500 BGN for a 200 sq.m. house in a very bad condition, situated in the village of Melnitsa. This property is almost impossible to sale on the Bulgarian market even for 200 BGN. Of course, there are also some very nice properties, which can be sold for 18-20 000 BGN.
I am glad we managed to sell the properties of many solitary old women, who got enough money to buy apartments close to their children.

Q:Is the lack of infrastructure a problem for the foreigners?
A: Not at all. If there is no infrastructure in the village, ten kilometers away is the main road leading to Bourgas and the airport there. May be soon the border to Turkey at Lesovo-Hamzabeili will open and this will allow the foreigners to travel often to Istanbul. Of course, the purchase of properties has nothing to do with the opening of that border or with some business interests. The houses are bought for recreation during the summer season.
For example, two of our clients are a financier and a lawyer from “Price Waterhouse Coopers” who bought properties in the village of Melnitsa. One of them will make a swimming pool in his property of 8000 sq.m of forest and the other one declares he will buy a cart and a donkey. When foreigners come to Bulgaria, the only thing they want to do is to have fun as much as they can. Of course, the properties we sell do not correspond to the standard of living of our clients. That is why we have a special team, which controls the repair works and have good contacts with construction companies all over Bulgaria. We insist the repair works to be done by local unemployed people from the villages. This is another way to help people in these areas.
On the surface you see deal – foreigner – sale but things do not stop here, we have many engagements towards the buyers. Otherwise, they may never come back here to see their property, which they have bought so easily and on such a low price.

Q: What are your Company plans for the future?
A: I hope we will be able to achieve one of my dreams – to attract at least one well-to-do man in each village, where we sell properties in, who will invest in the region and will ensure occupation to the local people. There is a serious interest on behalf of the British business and we are on our way to accomplish ideas for investments in the region, though I do not want to reveal the specific projects.

Q: What can we expect on the Realties market?
A: Real Estate Properties market is very dynamic at the moment. The prices go up. As a whole I think that the statistics are not updated and do not reveal the real situation on the market.

Q: Do you also sell agricultural land? Are your clients interested in that?
A: Our Company strategy is to give new life to the old properties in order to revive the villages. This is something completely different from selling land. We restrain from selling agricultural land, unless we have specific quests from clients with particular projects.

Q: Bulgaria will soon enter NATO and the European Union. Will this process reflect on the Realties market?
A: The Realties prices are expected to go up. Our future acceptance in NATO and the European Union will activate the market. At the moment the average price for a sq. m of living-space in Budapest, Prague and Warsaw is at about 1000 – 12000 Euro/sq. m. These countries are 2-3 years ahead of us in the reforms. At the moment the average price in Sofia is 400-450 Euro per sq.m. The tendency is quite clear – in three years time, if we follow the same direction, the prices will reach these of Budapest, Warsaw and Prague. This comparison however is relative, since we can not prove that we are catching up with Slovenia, Czech Republic, Poland and Hungary. So, there is no guarantee that the prices here will reach the prices in these countries.