The current low level of property prices in Bulgaria, along with its fast-growing economy and the extensive inward investment it is attracting, combine to make the Bulgarian housing market one of Europe’s most bullish opportunities. However, it is not only the low prices that are attracting investors. The tourist potential, as
well as Bulgaria’s recent entry into the European Union, indicates signiicant price growth in the future and so makes Bulgaria a compelling choice for the property investor.

The World Tourism Organisation (UNWTO) describes Bulgaria as one of the most appealing �new faces’ in the tourism industry today. The WTO also makes bold predictions for tourism igures, predicting in excess of 20 million tourists annually visiting Bulgaria by 2010, making it one of the world’s greatest emerging markets.

This has obvious positive repercussions for the investment market. 

The increased exposure enjoyed by Bulgaria recently as a tourist destination is a signiicant advantage to its economy in its own right, and has led to a dramatic increase in visitor numbers. Statistics gathered by the National Statistical Institute
(NSI) of Bulgaria shows that between 2000 and 2004 the country saw a 50% increase in foreign visitors (with a 90% increase from EU visitors), including a rise of 20% in 2002 when other, traditionally popular, destinations were suffering a drastic downtown in numbers. Visits to Bulgaria by foreign tourists rose by 5.1% year-on-year from January to September 2006, according to the NSI, generating increasing demand for rental properties in the country.

A combination of well-developed and constantly expanding summer resorts, irst-rate ski resorts with guaranteed winter snowfall, and opportunities for city breaks ensure a solid and sustained growth in visitor numbers. In addition to this, the increased number of low-cost airlines servicing Bulgaria means tourists have easier access to the country. The government is keen to drive forward plans for this growing sector as it currently accounts for some 16% of the Bulgarian GDP, and despite the remarkable rise in visitor numbers, there remains a great growth
potential in Bulgarian tourism for the coming years.

In 1996, Bulgaria saw the fall of its socialist government, and a boost to its market reform that marked the beginning of its development into the burgeoning economy it is today. The new government set about overhauling the economic system and since then the economy has seen a massive improvement to stability with decreased inlation and continuing reforms that auger well for a thriving future. Economic growth remains stable, GDP growth reached 5.5% for the full year 2005 and 6.1% for the irst half of 2006. Figures are expected to conirm the estimated growth of 5.5% for the full year 2006, and remain at that consistent and solid level throughout 2007.

Economic forecasts for the next few years predict continued growth in the Bulgarian economy, and this climate of growth is creating successful local businesses and attracting signiicant levels of Foreign Direct Investment (FDI), bringing employment
to the country and expansion to its real estate market.


The period 2003-2004 was unprecendented in terms of the FDI attracted to Bulgaria. According to preliminary data, the FDI in Bulgaria for the period January – September 2006 amounted to €2,845.1 million (11.8% of GDP) against €1,292.2 million (6% of GDP) attracted in the same period of 2005.

FDI reached a record high of €3,552.2 million in 2006, corresponding to 11.5% of GDP, and reaching the highest level of the countries in Central and Eastern Europe according to igures from Bank Austria Creditanstalt. This is extremely positive news for the future for Bulgaria’s economy and accordingly the scope for
expansion in its real estate market.


The property market of Bulgaria has achieved an incredible rate of growth over the past few years, bolstered by its fast-growing economy and its admission into the EU in January 2007. Property prices in some regions have risen by over 50% in the last two years alone, and are predicted to grow at the rate witnessed during the Spanish market boom, as the igures all point towards a fantastic opportunity for property investment.


Following its impressive annual capital gains averaging 30% in recent years, Bulgaria’s property market’s more realistic annual growth rate of 15% up to the third quarter of 2006 sets the pattern for more predictable and sustainable long-term investment. The country still boasts low prices despite its admission into
the EU in January this year. Upon joining the EU, the cities of Warsaw (Poland), Prague (Czech Republic) and Bratislava (Slovakia) climbed more than 10 places in the �Mercer Cost of Living’ survey. Bulgarian property remains up to 40% lower priced than in these example countries. However, prices are predicted to
rise accordingly, as traditionally occurs following accession to the EU, assuring property investors of signiicant capital growth and a secure investment. 

In recent years, the banking market has opened up to mortgages, allowing Bulgarians themselves to borrow to buy their own homes. This move has been welcomed by property investors as it means that the property market does not have to solely rely on foreign investment to drive prices. As time goes on, this borrowing will support the booming market and result in sustained property prices with a strong demand for the foreseeable future.

Investors intending to take maximum advantage of this burgeoning market should identify the differences between the areas of the country. The �tourist areas’, including coastal resorts and ski resorts, have experienced capital appreciation as high as 36% or more, whilst metropolitan areas, such as the capital Soia,
have grown at a more moderate rate and at a steadier pace.

Bulgaria has expanded its international appeal over recent years as it becomes a popular destination for skiers, and the consistent increases seen in property values in the ski resorts illustrates the stability of this market. The Bulgarian mountains have snowfall from the end of December until mid-April, which translates into
long rental seasons, and a great attraction for potential buy-to-let investors.

The summer rental season in Bulgaria lasts from June until the end of September, and even then the Black Sea is popular for coastal holidays. From an investment perspective, the Black Sea coast is seen as a potentially lucrative area as prices are now increasing consistently on a year-by-year basis.

Bulgaria offers a diversiied range of real estate investment opportunities providing both growth and income in varying proportions across the spectrum.

Tourist zones have seen spectacular capital growth coupled with seasonal, and slightly lower, rental yields whilst metropolitan zones have beneited from more consistently higher yields with stable, consistent capital growth.