Bulgaria

dvdfan

Ill Edit To Be More Specific....

My Dad is thinking of buying in Sunny Beach Bulgaria, alot of the information available on the internet is biased and hard to find indepenadant information because it is from property websites. Alot of the forums seems to be people taking shots at people buying in Bulgaria because theyve heard the bubble is going to burst due to the massive inflation in prices over the last few years.

I think the only place in Sunny Beach to Buy is very close to the beach as from what ive heard they are massively overdevoloping there. My question is what is likely to happen if they amount of accommodation outgrows the amount of tourists. Id imagine the apartments and hotels in the outerskirts will have to drop theyre rental prices considerably which will also force the accommodations near the beach to lower their prices too although not as much. Will this effect re-sales their or would it still be easy to re-sale near the beach.

What about sale prices, in say 10-15 years when they want to sell as their looking at this as a long term thing will prices be badly effected by the overpopulation of accommodation. He really wants to buy in Sunny Beach because hes been there 3 times and really likes it so he can go over their rent free himself a couple of times a year. He understands the gauranteed Rental Income is basically included in the buy price but is there a big chance this could seriously flop as in he wont make enough rent to cover the mortgage. There would be no big problem if he was just breaking even and maybe even having to add a few bob each year to the mortgage but he just dosent want to be in the situation where he cant rent it out and cant sell it.

I would love to see an independant report from the likes of Reuters or BBC but i cant google anything interesting

BobSloane

Any stats on bulgaria? I'd usually check fold

Dub13

Why did you post this in Poker...?

5starpool

Hmmm, this is nearly a poker related thread, but not quite. Moved to Property forum.

dvdfan

Sorry Folks My Dad is computer Illiterate and posted this in the last forum i was using which was the Poker Forum. Thanks for moving 5star

whizzbang

I'd avoid Sunny Beach Bulgaria, they are building so many apartments that there is no second hand market and hence little resale value. Also the 3 years "Rental Guarantee" they give you is just loaded onto the top of the price you pay. the benefit to them is this means you won't try and sell the place for 3 years, by which time they will be long gone.

Not to mention that the rental market is only 2 1/2 months a year.

have a look here:

http://www.askaboutmoney.com/showthread.php?t=56262&highlight=bulgaria

A Random Walk

I consider Sunny Beach to verge on a scam. I'd recommend visiting it (not on an estate agent tour, on your own) and check it out. I've had some friends visit and every single one hated the place.

dvdfan

Theyve been there 3 times and love it and thats why they want to buy there because theyll have there own apartment whenever they want to go.

On the resale Value, i know if its overdeveloped its going to be harder sell but if they get an apartment on the beachfront will the resale value not hold there because it looks like Sunny Beach although its being over developed is a triving resort area and will continue to become more popular and people will always want an apartment close to the beach so maybe it wont be too bad as long as they buy in the right place or is that being over ambitious.

Im not sure what happens when a scenrio like this happens and the amount of tourists looking for accommodation is far less than the amount of accommodation. Id imagine its similar to off peak season, the prices will drop as people compete for business but in Off Peak Season do the beachfront Hotels and Aparatments drop there prices, i wouldnt think they would by much as they will probably fill them quickest anyway.

Unfortunately as i said all the information i can find is either hearsay from friends or friends but theres very little from people who have actually bought and are renting, id be really interested to hear from someone who actually bought and how they are finding it to rent. For example people say its a very short rental market i.e 2-3 months yet here are the tempratures:

Weekly Average Temp:
May 22oC (8 hours of sun per Day)
June 26oC (8 hours of sun per Day)
July 29oC (8 hours of sun per Day)
August 29oC (8 hours of sun per Day)
September 24oC (8 hours of sun per Day)

Info sourced from http://www.bulgariancoast.com/infotips/general.asp

The parents have been there 3 times May/June, July & September and although its not packed in September and Early May its still fairly Busy so id say the market at least for beachside apartments which is what they want to buy is around 4 months i.e Middle of May to Middle of Sept.

I also understand about the rental gaurantee thing just being a standard sales pitch which they want you to think theyre actually taking the risk out of things for x amount of years and in reality they just add it on to the house price.

Ive suggested buying a house somewhere in the country for around €10k and spend another €10k-€15k doing it up as the old bulgarian houses tend to be very run down some even without a toilet facility attached to the house and then the repayments would be small enough that it wouldnt be a risk and if Bulgaria's Tourist Industry continues to bloom inflation would increase the price of the house yearly not to mention that the house would increase in price from the renovations and it may be possible to get a long term tennant for the house at some stage although theyre wouldnt be as much pressure.

The_Conductor

The property market in Bulgaria is very problematic for a number of reasons including:

1. Temperatures over the past two years have been uncharacteristically high- while I know you are interested in Sunny Beach, and not ski resorts= Bankso and its ilk had temperatures in the low 20s in *February* of this year. Disasterous. Banks have foreclosed on a number of hotels- and the resale market for chalets/apartments inland has now totally collapsed.

2. Sunny Beach and a number of other resorts have had to evacuated on a number of occassions with false bomb alerts recently (? not sure what the story is there?)

3. While there have been a lot of stories about legal battles over land ownership, sometimes years after developments have been completed, its not as bad in Bulgaria as in Croatia- where its endemic. It is a possible problem though.

4. Overdevelopment of highrise apartment complexes, particularly on the Black Sea coast, Sunny Beach included, is already being compared to what happened on Spains Costa del Sol in the 70s. A lack of green space or any amenities other than the Black Sea itself, mean that local government officials are saying they can see a scenario, comparable to the Spanish situation, where they will be compulsarily demolishing highrise development to make way for green-spaces in the next 10 years.

5. Dead-zones have become a problem in a number of areas- particularly Bankso, Golden Sands and Sunny Beach. These are over developed areas, for the most part in the most up-market parts of these resorts. As a result of supply exceeding demand- a lot of the restraunts/hotels and other facilities are operating seriously below capacity and its considered inevitable that a large number of them, particularly in the more upmarket areas, are going to close. The Head of Bulgaria's Tourist board, Rumen Draganovs, on record as saying that Bulgaria has developed an enviable construction industry- not a tourist industry.

6. Property prices of ~500 per square meter in Sunny Beach are only 50% lower than those in the most exclusive parts of Sofia, where you would actually be able to rent your property.

If you parents really want to buy in Sunny Beach- it doesn't really matter what you say- they'll probably go ahead anyhow. Even if Spain's Costa del Sol is being held up as an example- its not a fair example- at least we are extremely well catered for in flights and frequency to Spain's resorts, which are also a lot closer than Bulgaria...... If you are willing to accept that the up-market areas of these resorts are going to close and you're going to be left with mass-market fish-and-chips resorts, fine- have a look at the Costa del Sol or indeed parts of the Algarve- thats where Sunny Beach and its ilk are heading......

Then again a lot of people are very happy with the Costa del Sol and the Algarve........

dvdfan

Thanks for the detailed reply smccarrick. Some interesting things to be considered. Just wondering is your knowledge on the situation based on you thinking of buying there yourself or have you just a general interest in the property market abroad.

chump

dvdfan wrote:

Thanks for the detailed reply smccarrick. Some interesting things to be considered. Just wondering is your knowledge on the situation based on you thinking of buying there yourself or have you just a general interest in the property market abroad.

dvdfan you'd be INSANE to buy there at this stage - it's all been said before no doubt... (cf. www.askaboutmoney.com - and search)

just don't

The_Conductor

dvdfan wrote:

Thanks for the detailed reply smccarrick. Some interesting things to be considered. Just wondering is your knowledge on the situation based on you thinking of buying there yourself or have you just a general interest in the property market abroad.

I've a general interest in the property market abroad- but have been looking at specific locations on behalf of family and friends. Re: the above information I posted- you will find most of it elsewhere if you look.

Re: Bulgaria- your best bet is to trawl through the different websites, gather up the pertinent information- maybe make it into a little infopack for your parents, and then and only then when they are in possession of the full facts, should they make a decision.

There is a lot of wonderful marketing bumpf out there about Bulgaria, Croatia and lots of other wonderous destinations- and how they have increased in value by 10-15% per annum over the last few years. It really pays to do a little digging behind all this wonderous marketing though. All is not quite as it seems.......