Over the last seven years Bulgaria has made impressive progress towards long-term stability and sustained growth. As a result of sound macroeconomic policies and deep structural reforms, average growth reached the levels of new Member States at about 5% per year in 2000 – 2004, and is estimated to continue that course in 2006 ¹. Today, Bulgaria is one of the most attractive markets in Eastern Europe with a relatively low inflation rate.

Many investors have already spotted that Bulgaria offers very good value for money, with letting potential as a holiday destination. According to a report of the Ger­man operator TUI released in end-2005, Bulgaria is the most promising tourist destination in South East Europe. The number of foreign tourists who visited the country in the period Janu­ary-November 2005 exceeded 4.5 million, a 5% year-on-year growth ². The best investment opportunities include the ski resort of Bansko and the Black Sea resorts of Varna and Bourgas. The capital Sofia is developing rapidly as a commercial centre. Average yields on rental properties are 8% to 12% with most investors (80%) buying in the Black Sea coastal resorts and 15% in ski areas. Some 80% are investing in new developments.

Property in Bulgaria, by Western European standards is very inexpensive. Bulgaria has so much to offer it is not surprising it is quickly getting more popular as an alternative country for property investment from the traditional European destinations. Peak real estate deals at the Black Sea coast are at 120 EUR/m2 but property experts expect this to rise to 400 EUR/m2 by 2007, the tentative year scheduled for Bulgaria to join the European Union.

Local property market is experiencing an impressive revival and there are several factors that contribute to this:

The market of Black Sea coastal real estate in Bulgaria has grown significantly since the beginning of year 2003. Sales prices of brand new income residential properties have increased almost twice in some areas compared to year 2002. Seafront real estate was on average 30% more expensive than water view locations. Bulgaria is still a popular holiday destination for lower income tourists, which is the main reason for higher demand for smaller and cheaper real estate.

Local market of residential properties in big cities along the Black Sea coast has grown notably. During the last year demand was higher than supply, due on one hand to the increased supply of mortgage loans and on the other to consistent migration of workforce from inside the country to sea resorts and big coastal urban centres like Varna and Bourgas where more jobs are available.

Plots of land along the Black Sea coast were also attractive for investment purposes. In 2003 their prices had increased more than 30% on average compared to year 2002. Some beachfront parcels for development of leisure properties had reached EUR 35/m² compared to similar properties sold at USD 15/m² in 2002. In certain areas of the Black Sea coast, close to leading resorts like Albena, Golden Sands, Sunny Beach and others, prices had increased more than twice for the previous year and varied between EUR 35-55/m².

In late 2003, Parliament approved changes to the Foreign Investment Act. These changes include treating domestic and foreign investors on an equal footing. The changes are also geared to reducing the amount of time spent on administrative issues.
Conditions and legal requirements for real estate purchases and investment in Bulgaria in case the buyer is foreign person (individual or company):