Attachment
PRICE VARIATION AND AVERAGE PROPERTY PRICES IN 2008
2008 was the year of the great expectations that the credit crunch, which later grew into financial, will not affect Bulgaria. That is why in the first nine months of the year there were almost no disturbances on the property market and good deals were concluded. However, the last three months of the year turned out to be critical for the real estate market and for the Bulgarian economy. Buyers and sellers turned into tennants and landlords waiting to see what the new year will bring.
The prices of the property deals in 2008 grew with 26% on average compared to those in 2007. The upgoing trend of the market slowed down in October to such an extent that no actual price statistics could be made.
The higher prices of the concluded deals were determined by the buyers’ preferences for properties of higher quality and standard. This trend in the property demand started in 2008 and continues in the new year.
The number of real estate deals decreased by 40% in 2008 compared to 2007. This is what the statistics of BULGARIAN PROPERTIES shows. The decrease in deals varies according to the region. The sales in Bansko, Pamporovo and Borovets are 80% less compared to 2007. The decrease in the Black Sea resorts is about 30%.
In Sofia the reduction in the realized deals is 33%, in Plovdiv – 50% and in Bourgas – 31%. There are regions like Vidin where the decrease in deals in 2008 was only 15% compared to 2007.
The average prices of properties bought in Sofia have increased by 18.5% on average compared to 2007 as the greatest increase was in the third quarter of the year followed by a standstill in sales and withdrawal of buyers which on its part led to a 20% decrease in the prices of the deals concluded in the last quarter of 2008. The average price of the properties bought in Sofia in 2008 is 96,200 Euro. The properties in the towns and villages around Sofia were sold at around 29,500 Euro.
The average price of the deals which were concluded in Varna is 107,500 Euro. The properties in the villages around Varna but not at the seaside were sold at an average of 31,300 Euro. There was an increase in property prices both in Varna and the surrounding towns and villages from January until the middle of the year. This increase slowed down and ceased altogether in the last few months of 2008 and as a result some of the developers adopted a policy of price cut or Christmas and New-Year promotions.
The apartments in Plovdiv were sold at an average price of 50,800 Euro and the rural properties close to the city – for about 17,300 Euro which is an increase of 24% compared to rural property prices in the area in 2007.
The average price of the properties sold in Bansko is 66,000 Euro, in Pamporovo – 77,000 euro, in Sunny Beach and in the resorts south of Bourgas the average price is 82,000 Euro and for those along the northern Black Sea coast – Golden Sands, etc. – about 110,000 euro. The data show that the preferences of those who wanted to buy holiday homes were towards luxury properties in developments offering more amenities, close to the ski slopes or to the sea, which defines the higher prices of the deals on the background of the falling prices of holiday homes in the unattractive parts of the resorts.
The average prices of the rural properties have not changed much compared to 2007. For rural properties located to the west of the sea in the Bourgas area the buyers paid 28 800 Euro on average. In the Vidin area rural properties were sold for about 12,500 Euro and the properties around Veliko Tarnovo – for about 14,200 Euro. To the southeast, in the popular with the foreigners Elhovo area, the properties were sold for 16,300 Euro on average.
THE MOST PREFERRED AREAS BY BULGARIAN PROPERTIES’ BUYERS
In 2008 BULGARIAN PROPERTIES concluded most deals in the area of Bourgas – including Sunny Beach and the other resorts in the area, followed by the cities of Sofia and Varna and the Plovdiv area.
Once again the most preferred properties in Sofia were those in and around the central area and the quarter of Lozenets followed by properties in the residential quarters along Bulgaria Blvd. as well as in the southern quarters of Boyana and Dragalevtsi.
As for the seaside resorts the buyers still prefer areas around Sunny Beach and Sozopol and Lozenets. However, what is typical is that there are almost no deals in the properties with bad location and far from the sea despite the fact that last summer we witnessed prices as low as 450-500 Euro in such areas of Sunny Beach. The buyers are already looking for first-line properties or for such that are not more than a five-minute walk from the sea.
Though with more expensive properties the resorts along the northern Black Sea coast also attracted a considerable number of buyers – both Bulgarian and foreign.
In the rural properties section BULGARAIN PROPERTIES’ buyers were most interested in the areas close to Plovdiv and Stara Zagora – there are a great number of well developed villages to be found there offering a good standard of life close to the cities. The rural properties close to the sea and around Varna and Bourgas were also quite popular with the buyers in 2008.
BUYERS' NATIONALITY
Together with the Bulgarian buyers, who traditionally contribute to about half of the real estate deals, the UK buyers still made up a big percentage of BULGARIAN PROPERTIES’ deals for 2008, though their number has decreased from 50% in 2007 to 30% in 2008. Their preference areas were those around Plovdiv, Stara Zagora, Montana, Vidin and Elhovo.
The Russian clients also made up a large part of the buyers of BULGARIAN PROPERTIES as they invested mainly in luxury properties in the big Black Sea resorts.
There is no other clearly marked nationality among the buyers. Representatives of almost all European and countries from all over the world have bought properties in Bulgaria.
PROPERTY DEMAND IN THE LAST 3 MONTHS
The buyers are still waiting to see what direction the market will take but they have expressed their interest in apartments in Sofia, Varna, Bourgas and Plovdiv. This applies mainly to Bulgarian buyers. What is interesting is that a considerable part of the demand is also focused on rural properties which are close to the sea, in mountain areas and around the big cities in Central Bulgaria.
The foreign buyers are very different in their preferences – they are interested both in luxury properties in Sofia, Varna and the resorts and in cheaper ones around the country, looking for good deals.
An interesting fact is that when it comes to the price the supply and the demand still can’t meet – the buyers look for properties 15-25% cheaper than the offered ones and deals are concluded only if the sellers agree to make a discount.
2009 FORECAST OF BULGARIAN PROPERTIES
The main trends will be:
• Property prices will not increase. It is most likely that the prices of quality properties will retain their current levels while the prices of properties that are of bad quality, with bad location, the Soviet-type blocks and some of the holiday homes will decrease to a certain extent.
• The clients will become more and more demanding towards the quality and the parameters of the properties they seek.
• New construction will be reduced to a minimum and not many developers will stay in the business.
• Many of the building projects will be on stand-by or will not be started at all. There will also be such which will be put on hold and will remain unfinished.
• The price of standard development land will decrease significantly. This will also be valid for the compensations.
• The market will work in favor of the buyer and the sellers will be more disciplined and inclined to make discounts.
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