LM Legal Services Blog

Russians buy hotels on the Bulgarian Black Sea cost for peanuts. They hire estate agents to look for cheap property, mainly hotel owners who are on the verge of bankruptcy or developers who cannot complete their projects. They also buy already developed projects for holiday resorts which have been denied financing from banks. About ten very good purchases at attractive prices have been completed since the beginning of the year. Most of them are for about 500 Euros per sq m. The jewel in the crown is a four story hotel in Svety Vlas the area of which exceeded 1000 sq m. The hotel sold for 300 000 Euros. The Russians invest their money in Bulgaria in order to save them, as the trust in the Russian banks have sharply decreased over the last six months.

About 90% of the buyers of holiday properties in Bulgaria at the moment are Russians. More than 80% of them are prepared to purchase off plan if an agency gives them recommendation. 60 % of the Russians pay on the spot in cash. There are two groups of Russians on the market in Bulgaria. Russians from the large cities came a year ago and started purchasing bigger apartments for themselves. This summer the second group of Russians from smaller towns like Novosibirsk and Saratov appeared. They took the niche of the Brits and they look for smaller and cheaper apartments.

The Bulgarians are still not a market factor. Richer Bulgarians prefer to buy properties in Greece. The property crisis will kill the speculators and will allow bigger players to take a bigger share of the market. Only the investors of long-term projects will profit. Currently, in order to complete a project successfully, the investors need to sell off plan at least 30-40% of the development.