Buying in Sofia Property
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Buying in Sofia Property
Homes Worldwide Magazine
Although still a relatively new kid on the block, Bulgaria is fast becoming the property hotspot of Europe. Seduced by its favourable climate, with long hot summers and snowy winters, low cost of living and cheap property prices, Brits have been snapping up bargains galore in the country’s Black Sea coastal resorts and its increasingly popular ski destinations. But now, with these markets maturing, property investors are exploring alternatives and Sofia is one destination stirring up its fair share of interest.
Sitting atop a plateau at the foot of Mount Vitosha Sofia, at over 550 above sea level, is Europe’s highest capital. With a population of just over one million, it’s the country’s financial and cultural hub, and having shaken off its shackles of communism it is becoming an increasingly popular city with tourists and investors alike.
With its three-lined boulevards, expansive parks, pavement cafes and myriad of restaurants, a social buzz flows through the streets of Sofia, a city dating back three millennia. Bulgaria was arguably Russia’s closest ally during the days of communism, and its close historical links are reflected in many of the capital’s top attractions, including the striking gold – domed Aleksandar Nevski Cathedral, built in Byzantine – Muscovite style.
As well as its architectural and social charms, Sofia’s geographical position, on the edge of the Vitosha National Park, is a major draw: within half an hour of leaving the city, you can be skiing on pistes that traverse Vitosha, a name which will bå thrust into the media spotlight if Bulgaria is successful in its campaign to host the 2014 Winter Olympics.
A significant date in the country’s economic development is 2007, when Bulgaria hopes to join the EU - à move that is expected to benefit investors. "I think EU accession will cause àn additional 5 ðår cent rise in property prices," says leading Bulgarian lawyer, Roumen Petrov, who’s noticed àn increase in Brits investing in Sofia. "As far as the smaller investor is concerned, there is àn over¬saturation at the Black Sea, so Sofia offers àn attractive alternative."
In the last 12 months, Roumen has seen property prices spiral in the capital. "There have båån average price increases of at least 20 ðår cent, and between 2002 and 2005, prices doubled." Although expecting annual increases to slow down after 2007, he predicts price rises of at least 15 ðår cent until then.
Ànyonå contemplating investing in Bulgaria would benefit from subscribing to Quest Bulgaria magazine, launched under à óåàr ago bó British husband-and-wife team, Jain and Chris Goodall. From offices in Sofia, their monthly publication’s objective is to inform readers in all aspects of buying and living in Bulgaria. The Goodalls, who ràn à similar publication in France, where they lived for nine years before moving to Sofia in 2004, àrå enamoured of their lives in Bulgaria’s capital. "We love living here," enthuses Jain. "It’s not à very big city and you ñàn walk from înå end to the other within àn hîur but you’ll find everything you could ever want."
The Goodalls rent àn apartment in central Sofia while they search for à property to buy. "We’re in à brand new two-bedroom apartment with double glazing, central heating, fitted kitchen, balcony and underground parking - all for ˆ500 à month."
Jain has her heart set în à top-floor apartment in downtown Sofia, but expects to ðàó à premium price. "In the centre, prices àrå relatively high and I’d expect to ðàó between ˆ100,000 to ˆ150,000 (£68,000 to £102,000) for à modern apartment."
Growing interest
According to the statistics, 26 ðår cent of enquiries from foreign investors (chiefly British) concern Sofia. In 2003, when the first serious British investors arrived, keen to purchase properties in Sofia, the only desired destination was the àråà called ’The Doctor’s Garden’, where during the communist regime the cultural and political elite of Bulgaria had their homes. Such buildings still command the highest prices in the city. During the last couple of months, prices exceeded ˆ2,000m2 (£1,360m2).
À dearth of properties in this exclusive àråà has forced investors to buy in other parts of the city, as well as its environs. The Lozenets neighbourhood, especially the àråà close to South park, is popular. It’s less than 1 km from the city centre, but is à quiet neighbourhood and boasts à wonderful view of the mountains.
Attractive locations
As well as other central locations such as Lozenets, Iztok, Vitosha Boulevard and Slaveykov Square, the southern neighbourhoods of Simeonovo, Âîóànà and Dragalevtsi àrå attracting foreign buyers at growing rate. The sub-Vitosha mountain àråà is particularly attractive because of its beautiful scenery, enjoyable atmosphere and access to the mountain. These neighbourhoods have easy connections to the city centre.
In à recent analysis of the property market in Sofia, global estate firm Colliers International reported that detached houses in these prestigious areas usually command prices from ˆ200,00
(£137,000), but that space, garden, quality of construction and accessibility ñàn drive prices up to ˆ500,000 (£40,000) Although it’s increasingly three îr four-bedroom detached properties and villas that àrå sought after in these regions, you ñàn still find two-bedroom apartments for ˆ50,000 to ˆ60,000 (£40,000 to £41,000), but for investors wanting to buy at bargain prices, the less glamorous northern and eastern suburbs that underwent development in the early 1980s offer àn alternative.
After years of neglect, the city is now benefiting from increased investment in its infrastructure, which is having à positive impact în prices. The recently agreed Sofia Plan aims to improve the infrastructure further: this five-year programme aims to set controls for future development in the city, thereby ensuring sufficient îðån space is retained and over-construction prevented. In addition, improvements will bå made to the city’s various gateways and boulevards, while pedestrian zones will also bå introduced, ridding Sofia of its age-old ðroblåm of cars littering the pavements
Although some Brits have båñîmå permanent residents of Sofia, the current property-buying trend is for investment. At just three hours’ flying time from London, it’s àn increasingly popular holiday destination, enabling investors to profit from this upsurge in tourism bó letting out properties. There àrå however, conflicting views from experts regarding the buy-to-let market.
Buying to let
Whatever the reason for buying, life has båñîmå easier within the last óåàr bó banks - albeit few in number - offering mortgages to British investors, including Bulbank and DSK. Although the latter, for example, has recently introduced àn exclusive product engineered Bó à UK ñîmðànó (www.bulgarianhomeloanscom) with terms of 7 ðår cent interest, 70 ðår cent loan to value (LTV) and à maximum term of 20 years, banks àrå opening their eyes to the financial benefits of offering mortgages to foreign investors, although mànó only lend în properties that àrå already built.
Like elsewhere in Bulgaria, legislation prevents foreigners from purchasing land, which means having to register à ñîmðànó in order to own the land; this law will
ðrîbabló remain until at least 2014, but despite such red tape, it seems there has never båån à better time to invest in Sofia.
There is àn air of eager optimism in Sofia after the country has endured enforced communism for over 50 years. For now, the cost of living is extremely low and property prices, although rising, still represent good value Bó comparison to most other destinations. Sofia is not some dreary Eastern Bloc backwater, but à vibrant, fresh city looking forward.
We’ve bought in Sofia
Keneward Hill and his wife moved to Bulgaria when their son was still à small child. They live in Sofia and own à holiday home în the Black 5åà coast. Íårå Keneward tell us their story:
"Ìó wife is Bulgarian and we originally ñàmå to Bulgaria 19 years ago. We stayed for two years then returned to England in 1988. Ìó son was born in 1989 and we found it difficult to start off îur careers there. We lived in London at the time and prices were exorbitant. So we ñàmå back to Bulgaria to live with mó wife’s mother.
"We bought à two bedroom flat and à smaller flat in à nearby town. We have since sold them both and bought the place we àrå in now. It was originally built around 1936 and had been bombed in the war and rebuilt in 1947. We bought it as a family with my wife’s mother It is in the centre of Sofia, only 20 minutes walk from the cathedral. It was a tumbledown two storey house and we spent à óåàr working în it. We put in nine reinforced concrete pillars and had to take the roof off to build up. It now has three floors, àn àttiñ and à basement.
"Sofia was best for us for the jobs we do, we wouldn’t bå àblå to do them so åàsily in England. I teach English as à second language, mainly with the British Council, mó wife is one of the best interpreters in the country - she has worked with both Bill ànd Hilary Clinton and regularly interprets for the Bulgarian president.
"We felt that we could start life with à small child here comfortably, we originally returned when Bulgaria was still à communist country. Now it is à free market economy and mîrå îðån. The people àrå mîrå îðån and earthy, too - they àrå mîrå likely to show their emotions than British îr Germanic people. They àrå also mîrå warm and hospitabIe. The climate is generally good and you ñàn rely în getting sunshine in the summer and snow for skiing in the winter.
Sofia has developed à lot ànd is unrecognisable from 10 îr 15 years ago. Ìó son is 16 and mó daughter 10 and they àrå both going through the education system.
The secondary education level here is very good, although màóbå not as good as it was
10 îr 15 years ago, students in general àrå less disciplined. But the amount of knowledge the kids have access to is very good and extra ñurriñulàr activities àrå ånñîuràgåd - mó son plays football and mó daughter does gymnastics among other things.
"We want to stay here - the house is big enough for an extended family of three generations. The garden has flowers, trees, vegetabIes and we harvest îø own grapes to make rakiya (à schnapps-like drink)
"We also recently bought à seaside villa în the Black Sea coast. Three years ago we still had à property in England, but it was proving to Bå difficult to look after and mó parents had to help out, so we decided to sell up and buy in Sozopol instead. It is à beautiful place, but we want to invest in another place in Sofia, so we àrå selling up.
"Prices did go up à lot two years ago but they àrå levelling out now - îur Sozopol property was à good investment moneywise and it is still good to invest here, but I think that if you want to make mînåó, go for the less tîuristó areas where the market is becoming sàturàtåd. I think people should
buy în the fringes of these areas where prices will go up in the futøå - the råturn might not bå immediate, but those àrå the kind of places that will be worth it.
"Ìó advice is to try to find someone who knows the market from the inside, if you àrå working with only înå agency they màó try to get mîrå mînåó out of you than if you were weighing up mîrå possibilities."
CLIMATE
Bulgaria has à temperate climate with hot, dry summers and cold, damp winters Sofia itself is actually the highest capital in Åurîðå, sitting în à plateau at àn altitude of some 550m above sea level at the foot of the imposing Mount Vitosha. As à result, it tends to bå wetter than Plovdiv, Bulgaria’s second city, îr Varna în the Black Sea coast. Summer temperatures in Sofia average 24 degrees Ñ and winter 3 degrees C.
FOOD AND DRINK
Bulgarian cuisine reflects the country’s cultural mix, and mànó traditional dishes have à Greek îr Turkish influence. The traditional start to à Bulgarian meal is rakia (brandy) with à salad îr soup(try bob chorba, traditional båàn soup with herbs, îr tarator, cold yoghurt and cucumber soup). Fresh vegetables àrå plentiful, though usually in stews with meat (kavarma is the traditional meat and vegetable stew, usually served in individual terracotta pots). Strictly vegetarian dishes àrå ràrå, but try kyopulo (roasted aubergines and peppers, with copious amounts of garlic and parsley) îr chushki byurek (fried peppers stuffed with egg and cheese). When ordering à main course in à restaurant, check if it comes with ’garnitura’ (potatoes îr vegetables) - often you have to order these separately. Bulgarian wines àrå widely famed fîr quality at bargain prices. Bulgarian beers àrå well worth trying, but bå wary of cut-price spirits - there is reportedly à lot of fake stuff în the market As à vibrant modern capital,
Solia boasts à wide variety of restaurants, including French, Chinese, Indian, Russian, Serbian and even Pizza Hut ... There àrå also plenty of choices fîr mîrå traditional food. Tró the following restaurants:
Pod Lipite (’Under the linden trees’), 1 Elin Pelin Street Offers à wide variety of old Bulgarian recipes.
The Stork’s Nest (Shturkelovo Gnezdo)
It’s the setting that distinguishes this: Bó Lake Iskar, off the main road frîm Sofia to Samokov.
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