Bargains on the Black Sea

As Bulgaria prepares to join the EU, it offers UK property buyers a good opportunity for investment

While most buyers of property abroad choose Spain or France, rising prices there and fears about over-development are causing many of them to search further afield. Each year sees new markets opening up, but the country that seems to be on everyone's lips now is Bulgaria.

Baljit Sodhi runs Avatar International, which markets property in Bulgaria and Croatia. "People are now sick to death of Spain and, having been one of the few companies to sell in Turkey, we have spotted another emerging market and believe that Bulgaria offers great investment potential." Sodhi recalls previous lost investment opportunities: "Many years ago I was thinking about buying property in northern France before they built the Tunnel. I missed out on that one and I am determined not to miss out on any more."

Avatar International had a stand at the Homes Overseas exhibition and received more enquiries about Bulgaria than any other country. Sodhi was surprised by the level of interest, even from people who had never visited it. "We were getting very serious enquiries, right down to the detail of how to lay deposits, and then at the end of the conversation they would ask, 'What's Bulgaria like as a country?' I was amazed."

TV programmes and magazine features may have fuelled this interest. Rachel First of A Place in the Sun says: "We recently focused on Bulgaria and Romania, as we wanted to take people off the beaten track and show them where they can get more for their money, but interest in these countries is slow. It will take a few more people to buy there before others will follow."

It was an article in Homes Overseas magazine that first caught the interest of Robert Erenyi, who has no qualms about being a pioneer in Bulgaria. "I was planning on buying in Greece but why pay £100,000 when you can get something for a quarter of that in nearby Bulgaria?"

Like other buyers, Erenyi is attracted by the prospect of Bulgaria joining the EU in 2007. Sodhi also believes in the "EU effect": "You only have to look at the Czech Republic to see that in the last year prices have risen by between 30 and 40 per cent."

Sodhi or Erenyi believe there are few risks in the Bulgarian market: "If a detached villa costs you £20,000, what can the possible risks be?" asks Sodhi. But Halcyon Properties' Pauline Gallagher advises buyers to choose somewhere like Cyprus, which has a better infrastructure. "The new Eastern Mediterranean is not yet in a position to sustain the lifestyle of an average westerner for much beyond the length of a holiday break. Ask yourself, 'Are the roads safe and hospitals capable of dealing with any ailment?' Even loss of facilities such as electricity and water can cause considerable upset. It's a case of buyer beware."

Arlette Adler of the Federation of Overseas Property Developers, Agents and Consultants (Fopdac) agrees, and warns that her organisation has not yet accepted any members who deal in the Bulgarian property market. "We cannot advise buyers when we cannot find out the exact rules and regulations ourselves. [Bulgaria] is now a fairly active market trying to get out but as an organisation we are responsible for advising and trying to protect the public against cowboys and unscrupulous agents. We do not know what is likely to happen in the future." She urges extreme caution: "It's a gamble, a bit like horse racing. Which country do you back? Romania, Bulgaria or Croatia? You could end up making a lot of money or you could end up losing the lot. Serious buyers should do as much research as possible."

Erenyi would like to see improvements to the Bulgarian health system but believes that the advantages for him far outweigh any concerns. Sodhi adds: "The Bulgarian tourism authority are very keen to promote their country's tourism next year so the infrastructure will definitely improve with it."

Prices are certainly tempting. Currently buyers can get a two-bedroomed, furnished apartment with parquet and terracotta floors, right in the heart of the city of Bansko, a popular ski resort, for £17,900. A log chalet in woods near Velingrad can be bought for as little as £12,900 and a new golf and beach resort on the Black Sea coast, just 10 minutes from Burgas airport, has apartments from €41,463.

Mike Hayes, the editor of Homes Overseas magazine, has himself been tempted by Bulgaria's prices and other attractions, and plans to buy a second home there. "It's an absolutely beautiful country that has everything – great ski resorts and wonderful countryside. I'm quite tempted by the smaller villages in the middle of the country, which have stunning Gothic churches, freshwater lakes and rolling hills. It's really like stepping back in time." Hedley is certain that the country will attract large amounts of revenue and therefore be able to improve its infrastructure in the run-up to 2007. "It's got to be the next big thing. I don't see that there is a particular risk, I see it as a good, solid emerging market."

Avatar International: 00 44 7802 531727; www.avatar-international.com

FOPDAC: 020-8941 5588; www.fopdac.com

Halcyon Properties: 01323 891639; www.halcyon-properties.co.uk

The next Homes Overseas exhibitions are at Glasgow SECC, 29-30 March and Cheltenham Racecourse 5-6 April. Tickets are £4 per adult, £3 in advance, children free (0870 120 2111).