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Standby on Bulgarian real estate market due to crisis in Ukraine

Russians are top investors on the real estate market in this country. 90 percent of deals along the Black Sea coastline are closed with Russian clients. Some 350,000 Russian citizens have bought property in Bulgaria over the past years. The crisis in Ukraine forced large Russian and Ukrainian investors to take a standby position. Two trends can be framed. The devaluation of the ruble will make Russian business look for a secure shelter for its money by investing in real estate properties here. On the other hand brokers have registered a sudden drop of clients from Russia and Ukraine. Thus a market for tens of millions of euros froze in a standby mode, waiting for the solution of the Moscow – Kiev conflict.

Russian businessman with a project for a complex of apartments along the Black Sea seaside has frozen his plans. A Ukrainian company, one of the major investors in this country is waiting for the development of the situation, in order to continue with its projects for the construction of holiday complexes near Burgas and a massive building in Sofia. Experts comment that the withdrawal of Russian capitals will continue and more and more Russians will look for a place for investments abroad. Moreover, the shares of many Russian companies have dropped, Deputy Chair of the Real Estate National Association Dobromir Ganev says in an interview for Radio Bulgaria:

“In situations, when the finance system is threatened, people often turn to an old manner of saving and security – real estate investments,” Mr. Ganev explains. “So, it would be a sort of a catalyst for Russian citizens, interested in acquiring real estate properties in Bulgaria. On the other hand, eventual sanctions against Russia cause the standby of major investors. There are people, who buy along the seaside, but there are also quite a lot big Russian investors, who are interested in investments, for instance in construction business and the sale of its product. So the crisis has more than one face. This all doesn’t affect the market that much right now. At the same time some Russians accelerate the purchases due to the drop of the ruble.”

Brokers register an increased demand for real estate properties in Bulgaria by Ukrainian citizens. “The Ukrainians have always been fewer, but now there is definitely some movement,” Dobromir Ganev points out. For now most of them opt for hiring an accommodation for a few months because of the crisis. Burgas and the resorts around are most preferred by the Russians. Now each 5th person there is Russian-speaking. “There are demands for the establishment of Russian schools in Burgas and the areas around the town, as they find the southern Black Sea segment more attractive,” Dobromir Ganev goes on to say. Brokers say a Russian lady has recently bought a penthouse downtown Burgas for EUR 200,000. Pomorie has now a Russian neighborhood – Little Moscow, with one of the largest Russian communities in Bulgaria residing there. 2,800 Russians have bought houses there in the course of 1 year only. Russians dominate the area of the Bansko winter resort either. Investors buy there a single house amidst a luxurious golf complex for EUR 3-400,000. Their motivation is a bit different.

“Russian citizens acquire properties along the Black Sea coastline for a longer stay, unlike Englishmen, who bought for the purposes of profits only,” Ganev explains. “The profile of the buyers: retired people, middle class people, state servants, young people. The demands are different, sometimes the budgets are small, other people have more money…”

The Russians also buy properties with business purposes. “Some of them, the ones that reside longer, develop their own business too,” Ganev says. Official data says that only for 2013 other 10,000 Russian citizens have bought Bulgarian real estate property, mainly in the areas of Burgas and Varna. Their number is going down on the previous year, but the interest remains stable.