According to macroeconomic specialists in the real estate market, prices of properties along Bulgaria’s Black Sea coast are expected to continue a decline. The most-affected sector will be that of summer resorts, which has historically been the area with the most investor interest. Many investors have already turned elsewhere, as was shown through the drop in living and office space sale prices in and around Bourgas near the end of this summer.

As compared to autumn 2005, when new-building prices were between 1100-1200 euro a sq m, the current price for Black Sea coast properties, if dealing directly with the property’s owner, is about 790-820 euro a sq m, according to Imoti.net. A number of reasons have been given for this drop in sales prices, the largest one of which is unfulfilled expectations in regards to a quick return of monies invested through the seasonal renting of properties. Given that the peak summer tourist season lasts only two to three weeks, it is evident that constant occupation of rented facilities is not a realistic expectation. (But doesn’t real estate involve some requisit hopeful thinking?) Also, the low standards of infrastructure and services in surrounding areas did not contribute to attraction of tourists.

This is in direct contrast to the increase in sales prices seen in the past year in Bulgaria’s smaller cities and regions with low population. The current price is 100 leva per 1000 sq m for agricultural land, according to the National Real Property Association, and it is expected to increase with the country’s now-certain European Union accession on January 1 2007.

Residential and commercial real estate property is also expected to see continued demand. A significant numer of the purchasers are foreigners from the UK who have taken a liking to Bulgaria as a holiday location. Many real estate specialists, however, say that the market has reached its current peak in price increases, and prices will stabilise.

As concerns holders of already-built real estate, a new law will come into effect on January 1 2007. A change in the current law on value-added tax (VAT) foresees that deals on all buildings constructed before 2001 will not have VAT included in their sale or purchase prices.

In theory, this could indicate a slight reduction in the sales price of not-new apartments. According to state law, new buildings are those that have had their use specified no more than five years ago and have at least attained the stage of core construction.