If you’re looking to invest in a residential asset in CEE, Bulgaria might be the best choice for you. Boasting with natural beauty, the country attracts many tourists, while also providing a growing and stable environment for its residents.
Bulgaria's economy has been steadily growing, driven by various sectors such as IT, tourism, and manufacturing. This economic stability and growth foster a favorable environment for real estate investment. A growing economy usually translates into increased demand for housing, which can drive property values up.
Furthermore, infrastructure in Bulgaria is continuously improving, with significant investments in transportation, healthcare, and education. Modern infrastructure enhances the attractiveness of real estate, making properties more appealing to both residents and investors.
Whether you’re looking to buy to rent or just to have a vacation home by the sea, the mountains or in a vibing capital city, here’s what you should know before deciding to invest in Bulgaria:
Real estate growth
Bulgaria offers competitive real estate prices. Whether you are looking for a city apartment, a coastal retreat, or a mountain chalet, you will find properties at significantly lower prices compared to Western Europe. This affordability allows investors to enter the market with a lower initial investment and the potential for high returns.
Bulgaria is delivering more building permits. In 2023, the number of building permits reached over 9K units which indicates a “favorable sentiment towards real estate investment.” - source. According to the National Statistical Institute of Bulgaria, Bulgarian municipalities have issued 40,7% more building permits, showing that the market is on a growth trajectory.
And it’s not just the capital city that makes a good option for investments. Bulgaria is a popular tourist destination, thanks to its beautiful Black Sea coastline, ski resorts, and rich cultural heritage. Interest in tourism leads to a surge in short-term rental properties, especially in popular tourist areas.
Its provinces offer cost-friendly options, with 5-7% growth rates in Plovdiv, Bansko or the sea coast.
Here’s what Thomas Stanishev, Managing Director of Galardo Real Estate, says:
The market in Bulgaria is in very good condition thanks to high demand from buyers and low mortgage interest rates ranging between 2.5% and 3%, compared to 5-7% abroad. Bulgaria is an excellent choice for living as it is a small and very safe country offering a variety of attractions - from ski resorts and beautiful mountains to seaside resorts and rich culture. Additionally, the country is highly suitable for investments. Rental laws protect property owners from unreliable tenants, which is rare in other countries. There is rental flexibility, low income taxes of 10% and good rental yields that range around 5-6%.
High Return on Investment
Anyone, including foreigners, can buy real estate assets in Bulgaria. Bulgaria has a favorable tax environment, with low corporate and personal income tax rates, and attractive incentives for businesses and investors.
Bulgaria offers a flat income tax rate of 10%, one of the lowest in the EU. This low tax rate is advantageous for real estate investors, as it means higher net returns on investment properties. Furthermore, property taxes in Bulgaria are relatively low compared to other European countries.
The average price per 1 sqm in Bulgaria is EUR 1,381, and the associated costs of the property value are 3—11% (source). Prices for residential assets are also growing, by an average of 1,9% per quarter, bringing investors a considerable return on their investments.
The rental market in Bulgaria is thriving, particularly in major cities like Sofia, Plovdiv, and Varna. With the influx of international students, expatriates, and young professionals, there is a consistent demand for rental properties. This demand results in attractive rental yields, making Bulgaria an excellent choice for buy-to-let investments.
There has been a positive trend in Sofia's rental yields, with average rental yields going from 3-4% for a 3-Bedroom Apartment, to 5-6% for a 1 Bedroom-Apartment.
Tourism
Bulgaria boasts diverse landscapes, from stunning beaches and picturesque mountains to vibrant cities and charming villages. This is a destination that has something for everyone. There are endless adventures to be had in Bulgaria, whether you explore ancient ruins, hike in the mountains, soak up the sun on the Black Sea coast, or enjoy the modern delights of Sofia, their capital city.
Bulgaria's history stretches back over 6,000 years, making it one of the oldest inhabited places in Europe (Plovdiv, the second-largest city in the country, has been inhabited since 6000 BC). Balkan Mountains are the perfect backdrop for hiking, skiing, and mountaineering. Black Sea beaches and crystal-clear waters make Bulgaria's Black Sea coast a true gem for those who enjoy sun and sand. Sofia is a dynamic metropolis where ancient history and modernity coexist.
Bulgaria is an affordable destination, and the mix of all this natural beauty, culture, and economical opportunities, make it an attractive place to travel to or live in.
By purchasing properties that can be rented to vacationers or even long-term tenants, investors can take advantage of these advantages.
In conclusion, Bulgaria presents a compelling case for residential real estate investment. Its affordable property prices, growing economy, high rental yields, and beautiful landscapes make it a prime destination for savvy investors. Whether you are looking for a profitable buy-to-let opportunity or a charming place to call home, Bulgaria should be at the top of your list.
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