Bansko Property Market Update

Written by Dave Moore

Bansko Property Market Update

 

So what’s going on with property prices in the Ski resort of Bansko?

 

Back in late 2005, early 2006 Sales agents and developers sprung up from nowhere offering properties in the ‘soon to be famous’ ski resort of Bansko. Off-plan properties were being offered at between €1,000 and €1350/ sqm across the board (about 30% more than similar properties were selling for in 2004) apparently regardless of location. These properties were just part of fantastic complexes full of spas, swimming pools, saunas, ski storage areas, gyms, restaurants, casinos, bowling alleys etc… and it was almost impossible to see how you weren’t going to become millionaires in 3 years.

 

Move onto late 2006 and throughout 2007into early 2008 – fresh from fat commissions and an un-wavering confidence in selling properties to just about anyone, sales agents began producing even glossier brochures, more optimistic rental guarantees and expectations, more on site facilities, greater capital growth projections and a never ending queue of would be investors. Obviously this was all that was needed to justify raising off-plan property prices to between €1350 & €2,000/ sqm.

 

This growth in price was never based on increased tourist numbers, easier access to the resort, superior developments or an under-supply of property – after all, they were only off-plan prices that were going up. Instead these prices were based on the greed of developers, sales agents and dare I say it – naïve consumers. The only reason developers kept the prices at these levels were because those ‘soon to be millionaire’ British and Irish folk kept on lapping up the sales patter and parting with their hard-earned cash in putting down deposits for promised buildings and wealth in the future.

 

The only reason a brief history lesson is needed is because any property price comparisons should only be made between completed properties before and after. Anything in between was speculation and hype – 2 things which always make for a turbulent ride – as any equity trader over the last 2 years would confirm.

 

Well positioned one and two bedroom apartments in the town of Bansko with excellent on-site facilities are currently available to purchase at between €700 and €1000/ sqm (roughly about the same as 2004) – while poorly constructed studio apartments situated on developments in Bansko or Razlog with few facilities that may or may not be completed are available at between €375 and €600/ sqm.

 

Whilst I believe the prices have hit the bottom, given the fact they are roughly at or below construction cost it will take a number of things to happen in Bansko before these properties rise in value anywhere above inflation. A few of these events are mentioned below;

 

• Un-completed developments which mar the landscape need to be completed, or knocked down.
• Electricity supply must be increased and offered in a straight forward manner to the whole of the municipality
• Palatable, sensible mortgage products need to be made available to foreign investors to increase the number of would be investors
• Developers who have clients who have made partial payment towards their properties need to offer discounts and incentives for these folk to be able to complete on their purchase
• Ski runs need to be added – when the resort has 150km of runs with predictable conditions (this comes form snow cannons rather than relying on the weather). They also need to construct more challenging ski runs as Bansko is seen at the moment as very much a beginners resort although as some architects may testify, changing the geography is a very tough and in some cases impossible or prohibitively expensive task. It is also un-desirable to many nature lovers.
• Access to the resort needs to be increased to encourage tourist numbers. Ideally this would mean that Bansko would have it’s own airport, or at least more low-cost flights need to fly to Sofia from around Europe throughout the winter- Where are you Ryanair?
• Summer tourism needs to increase drastically – one golf course for a whole market is never enough. There is a real opportunity for adventure companies to take a hold of this market similar to the way they have in the French and Swiss Alps across the summer months.

 

Unlike the coastal market, I see the long term prospects of Bansko to be rather better. The reason being that Ski resorts are finite in number. Whilst buildings can spring up anywhere along a coast line, increasing supply and reducing demand – ski resorts, in contrast, can only occur in mountainous regions where snow (or skiing conditions) is relatively predictable. As such, if the tourism commission of Bulgaria together with local and national government can redress the balance between supply and demand, Bansko can make property owners money.

 

In addition, skiers tend to be more wealthy than your average holiday makers meaning they are best placed to cope with a rise in accommodation costs – although it should always be remembered that Bansko will only ever be popular as a cheap alternative to other European resorts – so never expect property prices to get anywhere near those of the French Alps.

 

My tip at the moment is that Bansko, can and should get better for property owners out there – you just need to wait for issues outside of your control to pick up.

 

But, if I want to cut my losses and sell now, how do I go about it?

 

Of course you could use the agency you bought the property from, if they are still aroundJ But remember, these agencies will charge between 6 – 10% for the pleasure and your property will be directly competing with brand new apartments offered by developers with significant incentives for sale. Your chances of sale and profitability through this route are greatly diminished.

 

Instead there are a small number of agencies who focus solely on resale properties, www.resellmyapartment.com being one of the most successful who charge a reasonable €2000 or 3% to sell your property. Using an agency like this is your best chance of sale, but you must be realistic with your expectations and take the advice from people who sell property for a living. To contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

Before deciding to sell though, consider this. On any investment be it stocks and shares, residential property, gold, pensions, ISA’s etc. you only make a loss when you sell. If you can afford to hold on and wait for the market to recharge to a suitable, realistic level that may be your best bet. You may not make millions like your sales agent told you, you were going to – but you may not make a huge loss either.

 

For ideas about Property Investment in the future, see my article ‘Property Investment – Lessons Learned? Tips for the future?’ by clicking here.

 

For details on the rental market see my article ‘Sunny Beach and Bansko rental market’ by clicking here.

 

For the ‘Sunny Beach property market update’, click here. Or if it’s ‘Sofia Property Market Update’ you want to know about, click here.

 

To speak to me about what to do now, or if you have any questions or comments on the article above – please contact me on +44 1142852958, +44 7738887555 or email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it