Bulgaria's holiday homes market develops

The Sofia Echo, 2006-09-04

     On August 24, an international real estate compamy published the first market overview of the Bulgarian holiday homes market. The report documents significant developments in recent years in both mountain and coastal resort areas.
     The holiday homes market in Bulgaria experienced significant development in the past year in these areas. Demand for holiday homes in the country has taken off in recent years. The upcoming EU accession, the growth of the tourism industry, and the comparatively low prices are among the main factors driving demand. Private middle-class individuals from Western Europe, mainly the UK and Ireland, account for most of the demand.
     The overall absorption rate of holiday homes developments as of June 2006 was estimated at 60 per cent in the mountain resorts and at 56 per cent for the coastal region. Bansko and St Vlas led demand in the mountain and coastal regions respectively, with absorption rates of 70 per cent and above.
     The supply of holiday homes in Bulgarian mountain regions is concentrated mainly in Bansko. The small town accounts for 64 per cent of the holiday homes in the Bulgarian mountain resorts, equivalent to 8000 units. Supply of homes in the mountain regions amounted to more than 12 000 units as of June 2006, which represented a 152 per cent increase from June 2005.
     The supply of holiday homes on the Bulgarian Black Sea coast is still mainly associated with developments located in the larger resorts of Sunny Beach, St Vlas and Sozopol. However, new supply is slowly moving to medium-size and smaller resorts. Coastal developments vary in size, some offering as many as 900 units. The holiday homes supply has increased by more than 6000 units in the past year. As of June 2006, holiday homes in coastal resorts amount to more than 22 500 units in various stages of development, from off-plan projects, to those scheduled to break ground, to already existing properties. The increase in supply represents 37 per cent growth from June 2005.
     Despite the fact that supply has been growing faster than demand in the past year, sales prices of holiday homes have remained stable overall. Prices of holiday homes vary according to several criteria, the major ones being location, quality of the resort, range of facilities, and the stage of completion. Prices are higher in already established and popular holiday locations like Sunny Beach, Golden Sands, and St Vlas on the coast. In the mountain regions, Bansko commands slightly higher price levels than Pamporovo and Borovets.
     Sales prices also vary according to the level of completion. When offered off-plan, prices of holiday homes are between 15 and 30 per cent lower than when the project is completed. When offered during stages of rough construction, units are sold at prices 10 to 15 per cent lower than for the finished product.

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