For sellers

Bulgaria’s continued delay entering Schengen impacts property demand

04 March 13

Today, Finland has officially joined the EU nations opposing Bulgaria’s accession to the Schengen area, further delaying the country’s quest for entry. Germany’s Interior Minister, Hans-Peter Friedrich, stated just two days ago that if Bulgaria’s accession to Schengen makes the agenda for the forthcoming European summit or if Bulgarian insists that the matter is voted upon, Germany will block this using its right to veto. The Netherlands and Germany lead the pack of seven nations who are against Bulgaria’s acceptance, which include: France, Denmark, Austria and now Finland.


Significant to all vendors of Bulgarian property as its eventual and assumed acceptance to Schengen is a vital motivation for Russian buyers, who currently account for the vast majority of the country’s property demand. Russian purchases are typically lifestyle acquisition; a choice made out of sheer desire rather than any prospect of financial return or gain. Rarely motivated by investment opportunity and seldom interested in rental income, the opportunity to own property within an EU country and thus enable extended visa rights are a far more significant influence, all prospectively extendable to the rest of the Schengen region. At the moment a Russian citizen can travel to Bulgaria as a tourist for the duration of their holiday booking, if they become a property owner they can apply for an owner’s visa and stay for up to 3 months in every 6 month period unrestricted by multiple entry. If Bulgaria joins Schengen then these owners would be entitled to arrive in Bulgaria and then travel onwards to Paris, Rome or Berlin unhindered and without any additional visa requirements, which is truly the essence and brilliance of Europe. This is a considerable pull factor for Russian buyers who seek freedom of movement within Europe, in a frail Bulgarian property market it is critical that the EU discussions for Shengen entry are kept buoyant and do not stifle property demand.



There are many theories as to why Bulgaria and Romania are being held back from accession, but in essence the key arguments fall into two camps. Firstly there are those who believe Bulgaria’s borders are too weak, corruption is too high and thus accession presents a security risk as Schengen visas issued in Bulgaria are likely to be subjected to bribery and thus put at risk the security of the other member nations. Second to this is the belief that Bulgaria and Romania joined the EU in too much of a hurry, on a wave of hype catalysed by the economic benefits of European growth, but since the financial crisis has dominated European efforts it has lost its expansion drive and the appetite to encompass the aspiring but poor eastern nations has withered and waned.


Croatia is set to join the EU on the 1st July this year. Other nations in talks to join include Macedonia, Iceland, Montenegro, Serbia, Turkey, Albania and Bosnia-Herzegovina, most of whom also have plans for Schengen acceptance and will most likely face the same arduous journey.


Should Bulgaria’s accession be indefinitely delayed or confirmed infeasible, then the Russian property demand will certainly react and opt for alternatives in other lower cost EU locations, Latvia or alike. However, as long as Bulgaria maintains its key competitive advantage of offering low cost sunshine property and its accompanying extended visa rights for owners, the more healthy the resale market will be for all concerned.