Fuelled largely by private individual investors from the UK, the Bulgarian residential real estate market is rapidly approaching epic levels of popularity.
The purchase of homes across the Balkan country has skyrocketed over the last two years.
Stefan Dimitrov, managing director of shipping and logistics company Allied Pickfords, recently told OBG that he has seen a dramatic rise in business from the British market segment over the past two years.
"There has been a trend of more British expats moving here," he said. "They're building UK colonies out there."
At the same time, according to the UK-based Assetz news service, around 250,000 Bulgarian home sales are expected to be closed by the end of 2005, a 28% increase over last year's 196,000 sales.
While much of the interest in residential property has historically been in resort locations - such as Varna and Burgas on the Black Sea and mountain ski villages such as Bansko and Borovets - remote village homes far from the hustle and bustle of urban life are also gaining popularity.
Nick Lavtchiev, director of Easy BG - a company that deals almost exclusively with UK clients - told OBG recently that, "Over-urbanisation is no good for this market. What is the point of going on vacation or having a home in a place that is as overpopulated and ugly as where you came from? There are plenty of other places in the middle of nowhere that are of interest to aspiring permanent residents."
Prices for flats in resorts along the Black Sea can cost upwards of Lv150,000 ($89,922), while a two or three-story house in rural areas of the country can go for as little as Lv15,000 ($8992).
Of course, many of the structures in less-developed regions lack modern amenities and require a good deal of renovation.
Yet, another appealing factor for prospective buyers besides price is the relatively limited restrictions on the purchase of land by foreigners.
Currently, non-Bulgarian individuals are allowed to purchase property, but not land, in Bulgaria. However, limited liability companies (LLCs) are able to purchase land on behalf of an investor, regardless of citizenship. According to local real estate professionals, the process of an investor forming an LLC is a mere formality.
This combination of relatively inexpensive property, minimal regulatory restrictions and a reduced population density make the Bulgarian countryside an extremely attractive proposition for those willing to take the plunge into Eastern Europe.
But the proud new owners are not the only ones to benefit from their investment. Often, the rustic country homes must be renovated and modernised, thus creating employment for carpenters, electricians, plumbers, gardeners and other tradesmen. There is also the possibility of the purchase of new household appliances and goods, as well as automobiles, all of which pump money back into the local economy.
However, while these purchases have fuelled double-digit growth rates over the last few years for individual investors purchasing single properties, this segment still only accounts for 7 to 8% of the real estate market. Large-scale development projects featuring hundreds of units that are rented or sold off still dominate the residential market.
For instance, the British Lewis Charles Sofia Property Fund announced on November 21 that it had invested $10.8m in seven real estate property projects in Bulgaria, primarily in ski resort areas.
In the town of Kavarna, with a population of just 13,000 on the Black Sea coast, land deals with large international developers for the year will reach Lv100m ($60.3m), according to the mayor, Tsonko Tsonev.
Such dramatic growth in both value and sales in the Bulgarian real estate market has led some to be weary of the property bubble bursting, causing a sharp drop in property values. Yet, while most in the real estate sector agree that growth will not continue to increase as briskly as it has over the last two years, most see it as more likely that the market will level off at a more conservative rate, rather than dropping off completely.
"I think that the growth of residential prices will slow down, but I don't think prices will decrease," managing director Valeri Leviev of Consult Elta Real Estate told OBG. "There is still a large supply of very good quality property."
Leviev also noted that domestic demand for homes was also strong due to the fact that a large majority of Bulgarians own their own homes.
Other international industry experts echoed these sentiments at the "The Big Deals in 05" international investment forum that took place on November 9-10 in Vienna.
"Bulgaria, together with Romania, holds significant potential in the commercial and holiday real estate sectors, where it is joined by Croatia," Deyan Kavrakov, head of Bulgarian real estate company ADIS, said. "These will be the most prospective sectors for the next three years."