Russians Are the Main Buyers in Bulgarian Seaside Resorts

Russian restaurants, bookshops, shops, Russian units in real estate agencies, Russian speech along the streets and on the beaches… In the last couple of years the Bulgarian Southern Black Sea coast is Russian territory where many of the signs and menus are written also in Russian.

It can’t be any different as at present 90% of deals with holiday homes along the Bulgarian Black Sea coast are concluded with Russian buyers.

For now the influx doesn’t seem to be sufficient to provide a market for everyone – developers, owners of land homes, Brits selling their properties in Bulgaria. It seems the challenge before the dozens of unfinished, finished and half empty complexes in the resorts is still pending.

Taking into consideration the big supply and the still slow sales, optimism would be premature. However, there is a market and Bulgaria continues to be among the destinations most preferred by Russian buyers.

The Compensating

A market that experienced a boom fast cannot but have at least one serious crisis. This is what the holiday home sector along the Bulgarian Black Sea coast has been experiencing as sales have decreased by 65% since 2008. The main reason for that is the withdrawal of British and Irish buyers which were among the most active holiday home buyers in Bulgaria for years. According to real estate agency BULGARIAN PROPERTIES in 2008 their share of deals with foreigners was 40% while Russian buyers made up just 20% of foreign buyers. However, later this all changed – from buyers the Brits turned into sellers and some of their properties were sold to Russians. But the problem is that even though data shows a steady increase of Russians buying properties along the Bulgarian Black Sea coast they are still not managing to fill the market vacuum left by the Brits and Irish.

Still, the data from the real estate agencies is optimistic – according to BULGARIAN PROPERTIES after the almost twofold decrease in deals in 2009 the holiday home market is becoming more dynamic and this year they expect 50% more sales compared to last year. “The recovery of the market is a fact but this recovery will be gradual and at prices much lower than those from the peak years”, comments BULGARIAN PROPERTIES’ Chief Operating Manager Polina Stoykova. This is even truer if we add another factor to the market equation – the economic crisis which seriously affected the Russian economy as well.

Russia felt the first significant financial jolts at the end of 2008 when the ruble depreciated a lot. The effect of the crisis was not felt as strongly in Bulgaria because the country is in a currency board and the rate to the euro is fixed. The effect on the development sector was immediate – construction was frozen around Russia, development companies started closing down… And the buyers’ mentality is that they first secure their main home and only after that think of a property where to spend their holidays and vacations. That is why there is nothing unusual in the fact that for a couple of years the holiday home stalls at exhibitions were empty and the interest in them has not returned completely.

And Bulgaria has a lot to offer, at least in terms of quantity. Official statistics shows that in 2006 alone construction permits for almost 2,000 residential buildings with 12,000 apartments were issued in the region of Bourgas, as many of them were holiday homes. The picture was similar in the next year as well, when building permits were issued for 15,000 homes. The pace of construction in the good times provided properties for sale and rent along the Black Sea coast for years to come.

In First Person

It has almost been a year now since Ekaterina became the owner of an apartment in a small residential building a five-minute walk from the beach in the resort of Ravda. In forums for Russians interested in buying properties in Bulgaria she writes that her property can be lived in all year round because the resort does not close down for the winter. There are all the necessary amenities close by. This way Ekaterina and her family spent their winter holidays at 15 degrees Celsius in Ravda instead of at minus 20 degrees Celsius in Russia. She also explains that there are 4 unoccupied apartments in her building and offers assistance to her fellow-countrymen wanting to buy there.

If Ekaterina is really an actual buyer she is a generalized image of the Russian buyer. They are still browsing the market with ready money to spend but compared to before now their budget is considerably smaller. In the first years after stepping on the Bulgarian property market Russians were part of the buyers looking for seafront properties and were ready to pay 100-150,000 euro and more for a holiday apartment. These clients are still here but their share is now limited and they are interested in a small number of luxury developments.

However, the big picture is different. According to local real estate agencies in the area of the resort of Tsarevo the average Russian buyer has a budget of 50-70,000 euro. According to BULGARIAN PROPERTIES this figure is lower – about 30,000 euro. Depending on the sum they have Russians looking to buy along the Bulgarian Black Sea coast can afford to buy a studio or a one-bed apartment (rarely a two-bed) in small resorts to the south or in the outskirts of bigger resorts like Sunny Beach.

From British to Russians

According to real estate agents Russians buying properties in Sunny Beach have a budget of up to 50,000 euro and those buying in Sveti Vlas – up to 60-70,000 euro. For that price they can find good deals as there is a lot of supply of apartments from Brits and Irish. Many of them find it difficult to repay their mortgages or they want to have funds to buy something in their home country. However, most of their investments have resulted in loss having in mind that since 2008 average prices of holiday apartments have dropped by almost 30%.

Real estate agents also report another trend – more and more people are looking for cheap properties outside the resorts. They are interested in settlements around the resorts of Tsarevo, Ravda and Pomorie. They mostly look for a place for holidaying or for retiring. Apart from the low price another advantage of those properties is that they can be used all year round and they are cheaper to maintain.

The profile of the Russian property buyer in Bulgaria has been changing through the years like that of the tourist. Many of the Russians looking for seaside properties come as tourists first, as at present many come to the country individually, stay in a hotel, rent a car, make viewings and haggle by themselves with developer and sellers. However, they should be careful as they risk a lot by doing that without a reputable real estate company to act as a mediator.

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