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Purchase of property in Bulgaria - Good investment.

Bulgaria’s housing market is recovering, despite meagre economic growth, and property transactions are starting to pick up.

In 2014, the average price of existing flats in Bulgaria increased 1.15% to BGN 874.49 (€447.02) per square metre (sq. m.), the first year-on-year increase since 2008, according to the National Statistical Institute (NSI). When adjusted for inflation, the price of dwellings actually increased 2.05% last year. In Sofia, the capital, the average price of dwellings was up by 3.1% in 2014 from a year earlier, at BGN1,501.73 (€767.75) per sq. m.

Bulgarian property prices are now 38.3% (-44% in real terms) lower than at their Q3 2008 peak, when average national prices reached BGN1,418.24 (€724.97) per sq. m.

Out of 28 provinces of Bulgaria, ten provinces saw house prices increase in 2014, including Stara Zagora, with an annual house price rise of 4.8%, Burgas (4.6%), Shumen (4.2%), Veliko Tarnovo (3.6%), Silistra (3.6%), Plovdiv (2.6%), Ruse (1.6%), Varna (1.4%), and Kardzhali (1.4%). There were price drops in Kyustendil (-6.3%), Pernik (-5.7%), Sliven (-4.1%), and Pleven (-4%).

From 2000 to 2008, Bulgaria had a house price boom, with residential property prices surging around 300%. The bubble burst at the end of 2008:
In 2009, Bulgaria's average dwelling price plummeted by 26.31% (-26.72% in real terms);
In 2010, the average dwelling price fell by 5.58% (-9.68% in real terms);
In 2011, the average dwelling price fell by 6.16% (-8.67% in real terms);
In 2012, the average dwelling price fell by 1.4% (-5.42% in real terms);
In 2013, the average dwelling price fell 1.21% (but increased 0.38% in real terms).

In 2014, the number of newly-built residential buildings rose 11.96% from a year earlier, to 2,462 buildings, according to the National Statistical Institute (NSI), in contrast to the declines of 8.34% in 2013, and 18.65% in 2012.

The current recovery is expected to continue. Demand for properties in the major cities will grow, and the supply will become increasingly limited due to the low levels of new construction, according to local property experts.

“An important element of the new market reality is the return of the confidence in the property market. More and more buyers are thinking of buying property because real estate is a safe real asset and good investment,” says Polina Stoykova of Bulgarian Properties. “It is clear and obvious that the buyers have permanently returned,” Stoykova added.

Bulgaria house pricesEuropean Union citizens can now purchase properties in Bulgaria, including land. The 5-year moratorium on land purchases, set as a condition in the Accession Treaty between Republic of Bulgaria and The European Union, was lifted in January 1, 2012.

Previously, foreigners could purchase land only in the name of a legal entity and were not allowed to own a property. The lifting of the ban now gives European citizens the right to own property as individuals.