On Bulgarian Property prices in Address
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On Bulgarian Property prices in Address
Mrs. Tsenova, how does demand match supply on the Bulgarian real estate market?
Prices of houses in Bulgaria have gone up in the last four years. The market is growing, the number of real estate companies offering Bulgarian properties is multiplying by the hour. You can see this trend just making a short tour of the main streets of Varna and the major cities.
Apart from the Bulgarians and foreigners who buy properties for themselves, serious investors also have their eyes set on the Bulgarian real estate market. Many of them consider Bulgaria today as what Spain, Portugal and Dubai used to be 10 years ago. The major buyers are interested in two main types of property - apartments in the urban cities such as Sofia, Varna and Burgas. In this case the condition of the buildings is not of primary importance, but the location is. The second ones are the properties built at the popular Black Sea Resorts - Sunny Beach, Golden Sands, and the skiing resorts – Bansko, Pamporovo and coming soon Borovets. Most of the buyers are looking for a small two-bedroom apartments, about 60-70 square meters each and are paying in advance about 1 000 Euro per square meter.
At the same time the fast growing supply on the market of residential real estates is a secular trend and as a result in the last few months we’ve registered an increase in the period from the submission of the offer to the conclusion of the sale contract. Now this period is about a month or two on the average, while one year ago the demand immediately took every new offer within few weeks. Nonetheless the number of permissions for building of residential properties has just started or is to start to grow - a fact that will be more and more apparent with the weather improvement, during the hot summer season. If until recently we registered a bigger demand than supply now things are back to their logical levels, the supply prevailing over the demand.
What are the rates of house building/apartment development?
At present on the territory of the biggest market in the region - the market of Varna, the buildings under construction are amounting to 500 000 sq. m. gross flour area. Total of 10 000 sq.m residential buildings have been completed in Varna from January to May 2005. About 80 000 sq.m. of future properties are at design phase. The market is flooded by a variety of forecasts, but presumably residential buildings of 1,80m sq. m. will be completed in Bulgaria in the next two years.
How are property prices appreciating?
Real estate market in Bulgaria for the last 14 years has improved consistently, but still could be defined as developing . In September 2002 National Real Estate Aassociation established REMI - an index of the real estate and investment activity of the realty market of Bulgaria. Bulgaria is the first country in Central and Eastern Europe to establish a national real property index. It is considered a serious indicator of the investment activity and business development. The index is based on information submitted by 176 member companies. For the period of 15 months (from September 2002 until the end of 2003), REMI increased by 21,9 points. In 2003, real estate prices average growth rate reached 18,2 points for the entire real estate market in Bulgaria. For the 12 months of 2004 the index increased with 30,9 points. From January to April 2005 the prices grew with 16,5 %. Unfortunately this review does not intent to be exhaustive and complete for the entire real estate market of Bulgaria. So I would like to say some words for the largest market, under my supervision – the seaside region of Varna.
Now Varna is characterized with dynamic local economic development and logically there are more offers of high quality in the recent developments or renovated apartments. The sale price depending on location and type of construction is in the range between EUR 420/sq.m. and EUR 1500/sq.m. In 2004 prices in Varna reached between EUR 300/sq.m. and EUR 1000/sq.m . This clearly shows that Varna is one of the cities with most noticeable rise of the real estate prices, an average 30 – 34 percent per year.
And despite the opinions of the real estate experts during the last few months that the real estate market has calm down, the prices of the apartments for sale keep rising. Although there are not so many offers at levels over EUR 1500 per sq.m., the properties worth the money – prime Varna downtown location, on sale after a general overhaul with built-in furniture, completely furnished, security systems, spectacular views etc.
What are current rental levels and forecast levels?
In the view of the fact that most of the Bulgarian families live in their own houses, the rental market is developed only in the major towns of the country like Sofia, Varna and Burgas. The foreigners, working in Varna are usually searching to rent a house in the green suburbs. On the average in the major towns in Bulgaria, the annual rate of return is around 9 percents .There are different prognosis for the future of this market, but most experts expect the levels to proceed slowly upwards and to report an increase of the rental levels of 20% at the end of the year.
Which parts of the main cities are most in demand?
A detailed analysis of the market in Bulgaria shows a lasting growth of the sales of properties in exclusive quarters of the largest cities. These are Sofia’s posh Lozenets, Iztok, Doktorski Pametnik, Boulevards Vitosha, Patriarh Evtimii and the downtown part of the capital. What regards the Sea Capital Varna, the interest towards the downtown and Grucka Mahala quarter is strongest, followed by the areas near the sea garden. In Burgas the quarters much in demand are the downtown and the coastal streets.
What about the foreign buyers?
The foreign buyers are interested in two types of properties – off-plan flats on the Black Sea coast/Slunchev Briag, Zlatni Piasaci, Sozopol, St. Vlas/ and the skiing resorts
/Bansko, Pamporovo, Borovets/ . Tourism is one of the key sectors in Bulgaria due to the excellent geographical location, rich nature, diverse relief and moderate continental climate. The main feeder markets are UK, Germany, Greece, Russia, USA, Japan.
When these people come in country they understand the potential of this place -
Bulgaria has more than 600 hot, warm and cold mineral springs of varied physical and chemical contents, mineralization, curative gases, biologically active trace elements, temperature and curative properties that create excellent conditions for balneology and SPA tourism. Also we have over 30,000 historical monuments from different historical epochs, 36 culture reserves, 330 museums and galleries that form an impressive base for the cultural and ethno tourism. Located in environmentally clean regions, Bulgarian villages are rich traditions and folklore, agricultural activities, preserved old crafts, and delicious and varied local cuisine.They have preserved their traditional outlook and genuine atmosphere for developing rural tourism.
www.sofiaecho.com
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