If I were to ask you to think of a European destination which boasts miles of golden sandy beaches, coastal summer temperatures comfortably averaging over 20oC and a number of stunning mountain ranges then no doubt a majority of you would conjure up thoughts of countries such as Spain, France and Italy. However, there will doubtless be those of you who will add another country to this list. One, that has not been traditionally popular with British buyers, yet has certainly made its presence felt in the second-home overseas property market in the past few years.

Ever since Bulgarian property first started attracting widespread British attention three or so years ago the country has quickly propelled itself into the position of arguably Europe's most exciting and popular new and emerging market. Go back 15 years and Bulgaria's Black Sea Coast was the established summer playground for residents of Europe's then communist regimes, while mountain resorts such as Bansko and Pamporovo were a closely guarded secret. However, the fall of the Berlin Wall and rise of capitalism throughout eastern Europe opened up the country to a whole new clientele.

While Brits were initially slow to jump onto the Bulgarian property bandwagon it was not too long before they joined the Germans in discovering the once forbidden delights on offer on the Black Sea Coast. In the last few years an increasing number of British holidaymakers have started to head east. Tourism figures show that in 2003 just over 159,000 Brits visited Bulgaria, while between January and November 2004 this number had increased to in excess of 250,000. This year over 300,000 Brits are expected to take a trip to the Balkan country, with the ski resorts located in the country's mountainous west, as well as most areas of the Black Sea Coast, enticing a majority of the visitors.

RESORT CHOICE
As British tourism to the emerging market of Bulgaria has steadily increased, so too has Brit interest in purchasing a Bulgarian property. Unsurprisingly, it is in the already popular tourist areas where overseas investment interest is at a premium. Says Tony Beecroft of Bulgarian Property Centre: "The most popular regions for foreign investors and second-home seekers are along the Black Sea Coast, particularly in resorts such as Sunny Beach and Golden Sands, and the cities of Varna and Burgas. "Other popular regions are in the mountains – the ski resorts of Bansko and Pamporovo both attract interest as do the mountain areas of Rhodope and Rila. Meanwhile, the town of Sandanski in the south west corner of Bulgaria is destined to become one of the most popular spa resorts in Europe, enjoying a climate of short winters and long summers, and within easy travelling distance of Bansko and the Greek border", Beecroft adds. Bulgaria's capital, Sofia, is also popular with overseas purchasers, particularly investment buyers. "In Sofia, as well as significant capital growth, there is also year-round rental potential", says Petko Petkoff of Allure Estates.

WORTH THE HYPE?
For a while now it has not been unusual for Bulgaria to be either described as the 'new Spain' or as being like Spain was 30 years ago. In fact, claims such as these have been one of the main factors in enhancing Bulgaria's growing reputation among British second-home seekers. However, such comparisons should be taken with a pinch of salt. After all, how often do the Costas endure winter temperatures below freezing? True, the eastern European country does enjoy some similarities – the beaches along the Black Sea Coast would not look out of place on the Costa del Sol, but the fact remains that in terms of infrastructure, economic stability and general appearance, Spain is streets ahead. However, it does have to be said that the emerging market of Bulgaria is currently better acquitted to deal with mass British interest than other countries located in eastern Europe.
 
While you shouldn't kid yourself that Bulgaria is or will ever be another Spain, this isn't to say there aren't plenty of reasons to at least consider purchasing Bulgarian property and it is most certainly an emerging market. For example, the opportunity to buy property in one of the country's ski resorts or even in Sofia offers purchasers an alternative from buying a coastal property. However, the main draw for those interested in buying a Bulgarian property is the cost. To put it simply Bulgaria is cheap, very cheap. "Bulgaria is a less expensive alternative to Spain", explains Petkoff. "You can have a delicious three-course meal for two with a bottle of good local wine for about £10", he adds. And it's not just the Bulgarian lifestyle which can be described as inexpensive. Bulgarian property is far more affordable than elsewhere in Europe's already established property markets. "For under 50,000 euros you could buy a house in the countryside in very good condition within the region of Veliko Tarnovo (central Bulgaria) and in its surrounding areas", says Beecroft. "For the same money you could also buy a modest property in the mountain villages, a new apartment in Sandanski or a small apartment on the Black Sea Coast. "For a greater sum, say 51,000 to 100,000 euros you could buy a decent apartment in Sunny Beach or Varna on the Black Sea Coast, or in the ski resorts of Bansko and Pamporovo", he adds. With a budget in excess of 100,000 euros at your disposal, you can start to enjoy far more luxurious properties throughout Bulgaria. "For over 100,000 euros you can buy new apartments in top locations or a detached house in a good area," reveals Darran Smith of Varna Property Sales. "More than 200,000 euros and you're looking at top-class apartments, penthouses or high quality detached houses, while over 300,000 euros will get you a five-star home with perfect sea views in the best areas."

However, warns Smith: "Be realistic – prices are good value compared to in the UK and other countries, but 5,000 to 10,000 euros will only buy you a house in a poor area and is more than likely to need pulling down." Beecroft also has a word of warning for anyone planning to purchase a Bulgarian property with land. "Present legislation dictates that foreign investors and second-home seekers are not allowed as individuals to buy land in Bulgaria and to do so they have to form a Bulgarian registered company. A reputable real estate agency should be able to help buyers with this process without too many problems."

BUILD YOUR OWN
Purchasing an existing Bulgarian property is not the only option open to Bulgarian holiday-home hunters. Helen and Jim Craig from the Isle of Man decided to buy a plot of land in Trakata, near Varna and build their own dream house. "We had looked into the idea of renovating a property but with some properties in Bulgaria we found that you'd be better off ripping them down and starting again anyway", says Jim. "So we decided to buy land and build our own. This is what our agent was in the process of doing and his property looked stunning. We brought our plot for £65,000 and estimate that it will have cost us a total of £110,000 once it is finished", he adds.

When complete the Craig's property will stand on a total land area of between 250 to 280 square metres, have four bedrooms and a double garage. Compare this with what a similar property would cost elsewhere in Europe you can start to see just how affordable a Bulgarian property is. However, Jim does warn that, while cheap, some Brits do tend to set themselves unrealistic purchasing expectations. "When we have been in Bulgaria we have spoken to a number of other Brits interested in buying property there who are under the impression they will be able to find a decent property for around 15,000 to 20,000 euros. If this is the case you are going to be disappointed."

So, what made the Craigs choose Bulgaria? "We're avid watchers of overseas property programmes and had become really interested in buying a second property", answers Jim. "Commercial countries such as Spain don't really appeal to us, so we were looking for a property in a country which could be considered to be more basic. "We visited Goa but found this was too basic. Then Helen got speaking to some friends who had recently visited Bulgaria and it sounded interesting. We researched a bit about the country on the Internet, then booked to go out to Varna for a week. We absolutely loved it. In fact, we like it so much out there that if we didn't have grandchildren at the age they are now, we'd probably move out there permanently once our house is built", concludes Jim.

ENTERING THE UNION
It's not only those who fall in love with Bulgaria's unique lifestyle who are keen to take advantage of the low property and land prices in the country. Over the last decade Bulgaria has taken huge steps in stabilising its economy and extinguishing the remnants of its communist past. In fact, the strides that Bulgaria has taken have been so large that the country is set for accession to the European Union in 2007. And all these factors, added to strong rumours that low-cost airlines could be serving at least some areas of the country within the next 12 months, certainly appear to have whet the appetites of a
significant number of investment-hungry buyers. "Bulgaria joined NATO in 2004 to become the 26th NATO member state", says Beecroft.  "And it is estimated that this, in addition with its forthcoming membership of the EU, will make real estate in Bulgaria of major interest to investors." There are already clear signs that as the country nears its EU entry date, so too does it edge closer towards a property boom, with prices already rising steadily over the past 12 months. "On average real estate prices in Bulgaria went up by more than 20 per cent last year, with those in Sofia rising by 40 per cent alone", continues Beecroft. "There is a realistic expectation of an increase of 50 per cent in property values in Sofia and the coastal areas before Bulgaria enters the EU." Petkoff echoes this point. "We have recently seen demand for Bulgarian property double and this will fuel prices even further. Expectations for the next 12 months are that prices will continue to rise by about 15 to 20 per cent nationwide", he says.

In fact, prices are rising so quickly that Smith advises potential buyers not to hesitate for too long when purchasing. "Whether you're buying a house or land, act quickly, if you think overnight the chances are that the seller could up their price. For this reason alone, solicitors and notaries must be used when purchasing a Bulgarian property".

A rise in property prices won't be the only affect EU membership will have on Bulgaria. "Euro entry will also assist the further development of the Bulgarian property market in terms of quality and standards of services, product range and liquidity", adds Petkoff. Of course, once Bulgaria is integrated into the EU there will also be greater improvements made to the country's infrastructure and this will undoubtably play a key role in making the country an even more appealing destination in which to own a property. However, significant changes won't happen over night and Bulgaria is still many years away from truly being able to live up to the 'new Spain' moniker so often attached to it. But for those who are willing to take into account the fact that Bulgaria is still a developing country which does not yet boast the same quality of amenities found in much of western Europe, or for anyone merely looking to make money from their property, a Bulgarian property could just offer you what you are looking for at an affordable price.

PURCHASING ESSENTIALS
Following Bulgaria's transition to a market economy the development of the retail property market has been difficult but steady. It is only in the last three years that it has become possible to take out a mortgage and buy a home in the country. As a foreigner you are still not legally allowed to purchase land in the country. However, you may for a Bulgarian company which will entitle you to own and purchase a property with land. If you are not looking to purchase a Bulgarian property with land, for example an apartment, then you will not need to concern yourself with this.

The company will need to be set up with the help of a lawyer who will register you as a Bulgarian company. Although it is only the name of the company that is important – you will not actually have to run a business – you will need to keep some money in the company's bank account and will require an accountant to check your finances every year. Most specialist Bulgarian property sellers will be able to help you with this process. However, recently Bulgarian parliament declared that foreigners will be allowed to purchase land outright one day, although there is no indication of when such a law will come into place.

TAXES AND OTHER COSTS
The harmonisation of Bulgarian legislation with that of the EU makes the procedure of a real estate transaction in Bulgaria not much different to other European countries. Most properties in the country are sold in euros instead of the Bulgarian currency – the lev – which makes the purchasing process even easier. The costs associated with the transaction are also very low. As elsewhere in Europe the transfer is subject to notary and municipal fees. The notary fees are approximately 0.4 per cent of the declared property price, while the municipal fees are two per cent. The owner of a property is also obliged to pay an annual property tax, which is equal to 1.5 per cent of the declared value of the home. In addition, owners will also need to pay waste-collection fees.

Read the latest World of Property interactive i-mag on line FREE

Search for properties in Bulgaria

For further information:
Bulgarian Property Centre 
Varna Property Sales
Allure Estates 

World of Property has produced Emerge, a handy 60 page guide to emerging property markets. To request a FREE copy, just Click Here, enter your address details and type the word Emerge in the Enquiry box and we'll do the rest. Or you can contact us by telephone during normal office hours on +44 (0) 1323 726040 to claim your free copy.

Image courtesy of BulgariaTravel.org

Article first published in December 2005