Real estate sales in the seaport city of Burgas in 2021 were 25% more than those in 2019 and 38% more than those of 2020. "The rise has been smooth since 2018, however, in 2021 it speeded up. There was stagnation only in the second quarter of 2020," said Stefka Kalcheva, chairman of the regional structure "Real Estate" in Burgas and manager of the "Dazara" agency.
"A small part of the recent market rise is due to pre-paid transactions. Another reason is the general upward movement of the market in recent years, stimulated by the favorable banking conditions, and also by the effects of the pandemic, which for the housing market were favorable", noted the regional branch of the "Adres" agency in Burgas. Housing remains the main segment of the city's real estate market, and in 2021 interest in "holiday properties" has also increased, they add.
Stefka Tomova, managing partner of "Yavlena - Burgas", specifies that the share of residential properties is 85%, with 15% for business properties and land. "The market dynamics are due to rising inflation, negative interest rates on deposits and low interest rates for housing loans," she summed up.
Kalcheva outlines several reasons for the activity of the market: "Interest in vacation properties in Black Sea resorts has grown, mostly from Bulgarian buyers. Demand for properties outside the city has increased - mainly in better-developed villages and villa areas. There has been big demand for properties in Burgas - mainly in residential buildings - new construction and renovated ones. Part of the demand also came from Bulgarians working abroad who have decided to go back to the country," she says.
Another significant factor is the purchases for investment purposes - often from buyers with saved money or investors who have concluded other deals recently. "Very often vacation properties are an investment and a way to store your savings," adds Silvia Gocheva, regional director for the Black Sea branch of the agency Luximmo.
In the first quarter of 2022, the trend of increased demand for residential properties in Burgas and for vacation properties along the Black Sea coast has continued, albeit at a slower pace. The growth of deals made in Burgas is 18% compared to last year; the average for the country is 11% according to data from the Registration Agency.
Demand is double that of supply
In Burgas, demand for properties outstrips the supply. "The number of buyers in demand is twice the amount of properties that are offered," say real estate brokers. This trend has been going on for several years and causes the continuous increase in property prices, which, according to a representative of "Adres", will continue this year as well.
Prices have been steadily increasing from 2018-2019 until now, says Kalcheva. According to her estimate, the increase from 2019 to now is about 10-15%. The increase in price depends on the type of housing, its condition, building type and location. Especially for the newly constructed properties, the price increase in Burgas is lower than in other larger cities in Bulgaria.
The most expensive properties are in the central part and Lazur area, especially those in new buildings near the Sea Garden and near the old Burgas. The cheapest one remains the residential area "Meden Rudnik", where an apartment in the initial stage of construction can be found for 700 euros per square meter. "The prices we observe in the most sought-after areas can be seen also in individual deals and in the more remote neighborhoods," say brokers from "Adres".
Who buys and who sells"All types of buyers can be seen on the market. The sellers are mainly construction companies, there is also a secondary market for residential and vacation properties," explains Stefka Tomova from''Yavlena". "A large percentage of properties for sale are "new construction", offered by investors. The sellers - individuals, are usually people who need a new property - bigger or newer, or those who are selling an inherited property. Another type are people who have permanently settled in another country and decide to get rid of their property in Bulgaria. Often, the buyers are also Bulgarians working abroad," explains "Adres". Stefka Kalcheva outlines three main groups of Bulgarian buyers: the largest are young people and families who are looking for a home, buyers with an investment goal - for renting out or as an investment of money. And people looking for a bigger or newer home. A large part of the holiday market participants are foreigners. Silvia Gocheva from Luximmo explains that sellers in recent times are mainly from Russia, the Baltic States and, less often, from Ireland. Buyers are mainly Bulgarians, Poles and Germans. Bulgarians buy mostly south of Burgas. There is also interest in this area from Germans who are looking for detached luxury houses next to the sea. Poles, Germans, Bulgarians and, to a lesser extent, Hungarians and Czechs tend to predominate north of Burgas.
More construction dealsThe share of deals of newly constructed properties is increasing, and there are two main reasons for that: the lack of sufficient offers of old properties and the change in the profile of the buyer (more and more young people are buying).
As in most places in the country, new properties are sold according to the preliminary plan. "In new buildings, customers are looking for modern and quality construction, settled relations between neighbors through professional management and maintenance services and functional common areas. The demand for old properties is mainly for renovated "panel buildings" or monolithic buildings. The advantages of those are the true square footage examination, the arranged inter-block spaces and the possibility of free parking," says Kalcheva.
Burgas grows in the north
"In Burgas, almost every plot of land in a key location is built up, but there is an opportunity to develop new areas," says a broker from "Adres".
The building boundaries of the city extend mainly to the north. And this is logical, considering that in other directions its growth is limited by the sea, Burgas Lake, Atanasovo Lake and the salt pans, and Mandre Lake. In addition, the "Meden Rudnik'' housing complex - southwest of the center - has been under development for years and continues to expand.
"In 2021, new construction within the city was very active in "Sarafovo", "Meden Rudnik", "Slaveykov'' and "Izgrev". In order to provoke investor interest, the municipality of Burgas has overseen residential construction and mixed-use buildings north between the "Izgrev" complex and Vetren. And this year, the municipal council of the city accepted the allocation of a new residential district on 200 acres on the site of the production bases of the former "Kambana" factory, says Tomova from "Yavlena".
New projects are already being built in the spare lots bordering the "Izgrev" and "Slaveykov" residential areas. The agencies indicate as desirable the areas around "Mall Plaza", "Galleria Mall", VHTI, next to "Heart and Brain" hospital.
"There are several large projects under construction at the moment, which is something new for Burgas and is definitely attracting interest from buyers. Otherwise, for the most part, residential buildings with 2,000 to 5,000 square meters of living space are being built" says "Adres".
"Spare lots for construction are difficult to find and there is interest from both local investors and from the capital," notes Silvia Gocheva.
For living - two-room apartments and houses, for vacations - small propertiesThe two-room apartments are mostly sought in Burgas according to the general data from the area. "Two-room apartments with a separate kitchen are the most scarce," says Tomova. The most attractive are- "the converted two-room apartments in old buildings, in which one more bedroom can be separated. In general, demand is for functional homes with more independent rooms and bathrooms between 70 and 100 sq.m", says "Adres". "The demand for apartments prevails, but in the last two years there has been an increased interest in single-family houses and areas within a radius of 20 km from Burgas - in Sarafovo and Kraimorie, Ravda, Pomorie, Lozenets," says Kalcheva. "Clients are not ready to invest a lot of money in a vacation apartment, and they don't need large areas considering the time they spend there. But as a rule, they prefer them ready, furnished and ready to move in to," says Gocheva.
"Kraimorie" - the new Sarafovo?
The newly built single-family houses in the south are mainly in the "Kraimorie '' district, and in the north - in Vetren, Banevo and the "Cherno More '' district, says Tomova. Others are Sarafovo, Lakhana, Lozovo, Mineralni bani, Rudnik in the north and the village of Marinka in the south.
"In the quarter "Black Sea", which is located on the road between Burgas and Kableshkovo and over which the planes to the airport land, you can still find a 90 sq.m house for renovation with a 900 sq.m plot for only 45 thousand euros.
"Adres" notes that more and more investors are turning their eyes to "Kraimorie" district. It is expected that there will be a construction boom similar to that of the last 8-10 years in Sarafovo district.
Silvia Gocheva, Regional Director for the Black Sea branch of Luximmo
War and construction delays
"The conflict in Ukraine will certainly affect the real estate market in Bulgaria. How exactly - depends on how it develops and its duration. Russian citizens are already encountering difficulties in making and receiving bank payments, and opening and maintaining current accounts in Bulgarian banks. This will inevitably block their ability to sell or buy properties in the country. The short-term future of tourism is also unknown at this stage, and a large part of the business in Burgas and the region is related to it. On the other hand, there is a possible interest in buying properties from Ukrainian citizens, as there were in 2014 - 2016," according to "Adres".
"Ukrainians can be "felt" in the city, but for the moment Ukrainian clients mainly rent. They have no interest in investing in a property in Burgas, because they have not yet decided what to do. But the topic is delicate and undergoing development," says Gocheva. Stefka Kalcheva notes that they rent long-term, and interest on the Southern Black Sea coast is mainly in Burgas, but also in Sunny Beach, Sveti Vlas, Pomorie and Sozopol.
She argues that delays in investments in new properties is possible due to the deterioration of the economic situation in Europe, the increase in the prices of energy and the lack of some raw materials, which affect the production and trade of construction materials.
Tomova does not expect serious changes in the real estate market. But her prediction is that the crisis in Ukraine will lead to weaker economic growth and slow the growth of real estate prices.
Credit-financed deals account for about half of the total, according to the various agencies. According to "Yavlena" data - one in four. According to "Adres" - a little less than half. And according to "Dazara" there is a balance with a slight advantage of credit ones. Young people who are looking for a first home buy mainly on loan. However, people with financial capabilities who prefer to take a loan and are ready to cover it in the event of a sharp rise in interest rates also buy, Luximmo explains. "For new construction, our customers deposit, hoping that they will be able to secure the purchase themselves at the construction stage and, in case of need, they will partially benefit from a mortgage loan," says Gocheva.