Bulgaria, a European Union member, recently secured a deal with Austria, leading to its upcoming inclusion in the Schengen area. The official accession is set for March 31, 2024, marking a significant milestone for Bulgaria. This development holds considerable importance for the country's real estate market.
Foreigners considering property investments in Bulgaria are keenly interested in understanding how the country's Schengen accession will influence the real estate landscape. Factors such as the transition to the euro, potential changes in property values, and other aspects hold significant weight for investors. Let's delve deeper into the impact of removing border controls and Bulgaria's entry into the Schengen zone on its domestic real estate market.
Historical context
Bulgaria has been an EU member since 2007. It grants citizens of this country and other EU states the freedom to travel, work, study, and purchase property. However, it is set to officially join the Schengen area on March 31, fulfilling all prerequisites and securing approval from other eurozone states.
Any shifts in Bulgaria's political and economic landscape inevitably reverberate across various aspects of life. The real estate market is no exception. The country's EU membership marked a transformative phase in real estate development. While the process wasn't instantaneous, the demand for Bulgarian properties gradually surged. It led to an appreciable increase in their value. The impending accession to the Schengen area is poised to introduce new dynamics to the real estate market, further influencing its trajectory.
Expected changes in the real estate market after joining Schengen Zone
The imminent entry of Bulgaria into the Schengen area has sparked concerns among Bulgarian real estate market participants and potential foreign buyers. Diverse opinions circulate. They range from expectations of a rapid market decline to a substantial increase in property values.
Notably, the pricing of apartments, houses, and various properties in Bulgaria has been denominated exclusively in euros for many years. This practice safeguards against potential currency risks associated with the depreciation of the leva and high inflation before the country transitions to the euro. Consequently, no significant changes in real estate prices are anticipated post-Bulgaria's switch to the euro.
Experts in the real estate market underline that buyers can anticipate only regular price fluctuations directly tied to heightened demand for housing in Bulgaria. Presently, there is a discernible trend of gradual value increase in real estate in Burgas, Sofia, and other Black Sea resorts and coastal cities. This trajectory is expected to persist, barring any unforeseen global financial crises.
Furthermore, the simplification of procedures for foreigners purchasing apartments and cottages could influence demand and, consequently, property prices. Therefore, there’s a possibility that Bulgarian real estate prices may rise following the country's entry into the Schengen zone.
Advantages of buying property in Bulgaria
Purchasing real estate in Bulgaria offers many benefits, but some of the most notable ones are:
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reasonable costs for various real estate categories on the Bulgarian market;
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adequate taxes;
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a wide range of property objects;
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a great investment climate;
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high standard of living in the country;
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favorable weather conditions;
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a prime location that makes it simple to travel throughout Europe from Bulgaria without a visa.
Because of these benefits, Bulgarian real estate is still in high demand in the EU market. As a result, buying real estate in Bulgaria for financial purposes as well as for personal use is appealing to a lot of investors.
Practical advice for real estate buyers
The Bulgarian real estate market is experiencing rapid development, with a surge in new properties due to numerous construction projects. Simultaneously, the procedures for foreigners purchasing housing are becoming more accessible. When contemplating the acquisition of an apartment or cottage in Bulgaria, it's crucial to consider the current laws of the country or seek assistance from our real estate agency.
The specialists at BolgariaDom are here to guide you through the process. They’ll assist you in selecting a high-value property tailored to your preferences. Moreover, the experts will accompany you throughout all stages of completing a purchase and sale transaction, including the registration of real estate with government authorities.
Trends and Predictions
Real estate in major cities and along the sea coast of Bulgaria is currently highly liquid. It’s in demand throughout the year, appealing for summer living and as a year-round investment. Foreign investors have utilized apartments and cottages in Bulgaria for many years to sustain and grow their income. Experts anticipate this trend will persist even after Bulgaria enters into the Schengen area.
Several additional factors may contribute to an increase in property prices in Bulgaria, include:
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improved credit conditions;
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the attraction of multinational companies from the EU, China, and the USA due to the country's transition to the euro;
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the growing trust in Bulgaria among solvent foreign investors.
Considering the present dynamics of the Bulgarian real estate market, our agency recommends not waiting for Bulgaria to join Schengen and adopt the euro but consider investing in an apartment or cottage by the sea now. All indicators point towards a potential increase in real estate prices in Bulgaria in the future.