Discerning property investors in Bulgaria today are turning their attention to the capital city of Sofia and veering away from the much hyped coastal and ski resorts, many of which simply do not have the amount of investment potential that Sofia offers today.
There is no shortage of coastal and mountain properties for investors but unless you have a personal wish to enjoy your holiday home for beach or skiing holidays, we advise particular caution in choosing these locations for investment purposes. One of Sofia's ace cards as an investment opportunity lies in the fact that, although it indeed offers ideal tourist accommodation, it is not completely reliant upon a tourist season to fuel its property investment. Well located, new properties will always appeal to both native and foreign city dwellers seeking permanent year-round accommodation in the city, as opposed to a few months of the year for skiing or beach holidays in the resort areas. Sofia property taps into various markets: a strong and growing corporate presence, a prestigious university, as well as its popular ski resort at Vitosha.
Nowhere else have the effects of new economic activity and EU membership been more apparent than in Sofia, and the city’s economy continues to grow even faster than in the rest of Bulgaria. Just prior to EU accession, Sofia experienced a huge influx of diplomatic staff and multinational corporations, including the likes of Ernst & Young, Ericsson, Price Waterhouse Coopers, Carlsberg, Johnson & Johnson, Fuji Films, Minolta, Philips, Sony, Porsche, BMW and Mitsubishi to name but a few. This increased activity has brought with it a fresh demand for the top-end, international standards. Meanwhile the entire population of Sofia has found a whole new appetite for luxury items, shopping malls and a better lifestyle typical of all vibrant European cities today. Sofia now buzzes with a new young, trendy, professional set, with an average age in the city currently of 38 years. The opening of the NBU (New Bulgarian University) in Sofia helps to supply an even better educated workforce to boost the country’s economy and reduce the already low unemployment rate, currently at 1-2%.
Property prices in Sofia are amongst the fastest to rise in Bulgaria. The city boasts one of the most active Bulgaria property markets with many foreign investors purchasing new apartments to help accommodate a huge increase in workers settling in the city, all seeking quality housing to buy or rent. Despite annual investment in new residential and commercial property in Sofia having doubled, there is still a huge shortage of such housing and current supply is simply not satisfying the insatiable demand for quality modern property.
Unsurprisingly, Sofia has the highest prices of all property in Bulgaria, while elevated salaries in some way compensate for this imbalance. Those who have already purchased a buy-to-let property investment in Sofia are now averaging about an 8% yield in addition to watching the value of their asset increase annually by between 10 and 20%. One of the best locations in which to invest in the city is the prestigious Ovcha Kupel district, on the doorstep of Sofia’s NBU (New Bulgarian University), near the new Business Park now under construction and a mere 20 minutes from the international airport, making for an excellent investment location.
As the capital city, Sofia also boasts a well developed transport network featuring underground trains, trolley buses and international rail and road links. Sofia is only a short 2 ¾ hours flight from the UK, with direct services from Gatwick, Heathrow and Manchester offered by BA, Bulgaria Air, Wizz and Hemus Air, further reinforcing the well served international business environment expected of a top EU destination.
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