Who is buying holiday apartments along the Black Sea Coast?

If I look back at the year in terms of sales of holiday homes on the Black Sea, the market has not been too uplifting for the sellers. There is still a mismatch between supply and demand. If one’s sales price is not competitive, they will ” not be invited up for a dance ”, meaning there will be no viewings.

Lack of interest from the Russian market
Interest from the Russian market has declined sharply this year, due to the political climate and the economic situation in the country. We find that more Russians choose to sell their holiday homes by the Black Sea.

New players on the pitch
On the other hand, we have experienced increasing interest from Ukraine. Quite some Ukrainians are nervous about collapsing of the country, and therefore choose to secure their savings and future by buying properties in Bulgaria, especially for all year living.

In Poland, the economy is growing, and new flight routes from 8 airports are opened to the Black Sea Coast. It has increased the interest in investing in a holiday apartment.

The Romanians have returned to the market, and have especially shown interest in the northern part of the Black Sea, in the Kavarna and Balchik area.

Finally, we have seen a growing trend from Bulgarians who live abroad, to choose and invest in a holiday home.

Robert Møller

 

Decreasing demand for used holiday apartments at the Black Sea Coast

complexThe number of buyers for holiday  apartments have decreased significant because of the following three reasons:

  1. The value of the ruble against the euro has for the last year decreased with 16.6%
  2. The political relations between Russia and Bulgaria have been compromised
  3. The Russians have started buying newly -built apartments in complexes built in Russian imperial architectural style

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Who is buying holiday apartments ?

The global crisis in 2008, has turned many things upside down in Europe. Everyday life has given us a new “agenda” in the media with headlines such as Ball aut,  bankruptcies, rising unemployment rate ……

The crisis which started in autum in 2008, has also affected the marked for buying and selling holiday homes  in Bulgaria.

The housing market before the crisis

After the millennium, it became possible for foreigners to buy property in Bulgaria. It was mainly people from England and Ireland who discovered the new market, followed by customers from Denmark, Norway, Belgium and Poland. It was not uncommon to buy one apartment or more off- plan, and to pay the purchase price in installments as the building was built.

The housing market after the crisis

In 2006 and 2007 it was also interesting for people from Russia and the Russian-speaking republics (with a population of approx. 250 million, of which approx. 150 million live in Russia), to buy second homes on the Black Sea.

The demand from the Russians to buy apartments in Bulgaria, increased significantly as the global crisis did not affect the Russian economy significantly. It was now possible for the Russian middle class to buy on the resale market, where the prices began to drop with 10 to 20% in value per year.

The Russians do not buy as an investment

Most of the people from western Europ bought holiday homes as an investment with the expectation for:

  • Rising housing prices after Bulgaria joined the EU in 2007
  • Rising housing prices with the replacement of the Bulgarian leva with euro
  • Recouping the investment in rental

The majority of Russians do not buy property as an investment, but to use the property. They are attracted to:

  • The hot summers and the fresh air from the Black Sea
  • The fresh vegetables and fruits
  • The lack of language barrier- almost all Bulgarians speak Russian

Today, 9 out of 10 apartments are bought by Russians. According to the latest statictics around 110.000 Russians are property owners in Bulgaria.