The country’s booming property market in recent years has been flooded by speculative projects, mostly from British and Irish investors, promising quick returns and huge profits. However, investors hit by financial problems in their parent economies have withdrawn leaving thousands of unsold properties along Bulgaria's scenic Black Sea coast and mountains.
Some officials see a partial salvation of the problems caused by the exodus of UK and Irish investors coming via tourists from the East – Russia and the former Soviet republics, but the most crucial change will be a new image with emphasis on the quality of the product offered.
“This crisis gives us the opportunity to seriously start thinking what actually is a holiday property – is a three-room, 40 square metre flat with a view of a concrete jungle a vacation property?” Kancho Stoychev, owner of golf course developer BlackSeaRama Golf and Villas, asked a recent conference on the Bulgarian real estate and construction market in Sofia.
“There is a crisis for the investment-speculative projects, not the vacation ones,” Lachezar Todorov, the executive director of local tourism company Terra Tour Service, told the same conference and added: “If a product is aimed at satisfying real needs, it will always be successful; people will always need to have a holiday.”
According to Yulian Georgiev, from UK-based real estate developer SimpliBulgaria, the biggest problem for the property market now in Bulgaria is its tarnished image – overbuilding, lack of regulation, investors’ greed, unfulfilled promises of beautiful infrastructure and forgetting the needs of the end client.
Poor and worn-out infrastructure, lack of international airports and low-cost air carriers are considered also as holding back the tourism sector in the country.
“Let’s not promise dreams, because when we fail to carry them out this hits us hard and then we need years to bring back the clients,” Georgiev said.
According to Yoav Shenhar, chief executive of the local unit of Israeli company Tidhar Group, Bulgaria is a “wonderful base for tourism” but clients will become more selective and the price of land must become more reasonable in the longer term for the market to grow further.
Angel Lingorski from Bulgarian developer Linexa Property thinks that investors and holiday property managers should be more inventive and focus on something unique to offer to clients – whether it be different kind of extras, party events, golf or other sports.
“We have access to a market of 600 million clients. I have to find 600 that would like my project, my segment,” Lingorski said, adding: “It is about creating an environment but not one and the same environment in each complex.”
“Except for luxury estates, we need an environment that should also answer the client’s demands – whether it would be yachts, golf or something else," Stoychev said.
According to Plamen Andreev, managing partner of Bulgaria's residential, retail, resort and industrial developer Planex Holding, the market still has a future but it will be a future of “reformed thinking.”
The market needs segmenting, correct targeting, environment, multi-functionality and plenty of extras, regulations, infrastructure, quality of service, and advertising in order to survive, executive director of local one-stop real estate services provider Bulgarian Properties, Mihail Chobanov, summarised. The hiring of international advisers and managers for projects will also help the better servicing of clients and keep the sector growing.
