Annual Report on the Bulgarian Real Estate Market 2009/2010

Jan. 26, 2010 - PRLog -- 2009 in numbers*:
• 36% decrease in the average property prices in the country compared to 2008;
• 40% decrease in the number of realized sales compared to 2008;
• 23% decrease in the average prices of apartments in Sofia and 55% annual decrease in the number of deals in the capital;
• 22.5% decrease in the average prices of apartments in Varna;
• 41% decrease in the average prices of apartments in Bansko compared to 2008;
• 40% decrease in the prices of apartments in Sunny Beach and the other southern Black Sea resorts;
• 53.5% decrease in the average prices of sold rural properties.
*The data is based on actually concluded deals by BULGARIAN PROPERTIES around the country

Main accents during the year:
• Continuous process of decrease in the properties’ prices;
• Conclusion of deals upon negotiation of prices lower than those announced;
• Demand and interest only in bargain offers;
• Limited bank financing as most purchases were cash ones.

SHORT OVERVIEW OF 2009

From the end of 2008 and during the whole of 2009 the deepening economic crisis and the stresses which people endured due to the insecurity of their income made a large part of the buyers postpone the purchase of a real estate for the future.

According to BULGARIAN PROPERTIES’ data the decrease in the number of concluded property deals is 40% compared to 2008. This percentage varies for the different regions – between 30 and 70%, as the decrease is biggest for the holiday homes at the seaside and in the ski resorts, as well as for the rural properties in the regions of Veliko Tarnovo, Montana, Kardzhali and Yambol. Despite the serious decrease in the number of deals in the ski resorts Bansko managed to partially regain the buyers’ interest in the second half of the year with an average of 41% price decrease compared to 2008.

Irregardless of the area and the property type the main trend was the same for all – bargain prices attracted buyers. Buyers continue following the market closely and react very fast if a bargain offer appears on the market. That is why our advice to the sellers looking for a fast sale is to offer a lucrative price.

The decrease in the average prices of realized property deals in 2009 is 36% compared to 2008. Therefore, 2009 marked the first year of the new century in which property prices in Bulgaria fell, and quite considerably at that.

In 2009 the property market entered a very difficult phase of property price decrease which has never happened in the short existence of this market in Bulgaria. In the beginning of 2009, for about 3 months, the market was at a complete standstill, waiting for better times, after which a staged price fall began and this made the market more dynamic at price levels far from those we knew from previous years. The decrease for the different property types varied – for some, for example properties in Sofia, the decrease happened faster, the market processes were more dynamic and there were deals throughout the whole year. While in other places – for example in Varna, prices fell in the second half of the year and this led to a slow residential property market which became more dynamic only in the last quarter of 2009.

PROPERTIES IN SOFIA
http://www.bulgarianproperties.com/Sofia_property/index.html

The property market in the capital Sofia is more mature and flexible than that in the other regions. According to the quarterly analysis of BULGARIAN PROPERTIES the average prices of the concluded deals are as follows:

• 1st quarter – 1,050 Euro/sq.m.
• 2nd quarter – 1,020 Euro/sq.m.
• 3rd quarter – 945 Euro/sq.m.
• 4th quarter – 980 Euro/sq.m.

This shows that the biggest decrease in the average prices of Sofia apartments took place in the third quarter – July-September, when deals were fewest. Most deals were realized in the fourth quarter – they were about 50% more compared to the previous quarter. This is due to the realized sales that were postponed during the year and also of the finding of bargain prices after the price decrease in the third quarter. At the end of the year there was a slight increase in the average prices of purchased apartments as in November it was the buyers in the higher segment that were most active – they bought apartments at an average price of 1,100 Euro./sq.m.

The average price of the apartments sold in Sofia in 2009 is 74,500 Euro which is about 23% lower than the average price in 2008 – 96,200 Euro.

VARNA
http://www.bulgarianproperties.com/Varna_property/index.html

Up until the middle of 2009 the market was at a standstill and the sales made up only 11% of the realized deals of BULGARIAN PROPERTIES, the rest being rental deals. Until the middle of the year realized sales were either of cheap rural properties or of extremely luxurious and expensive apartments in Varna and the nearby resorts (at prices of over 200,000 Euro).

In the second half of 2009 the property market in Varna started to liven up as sellers started decreasing the prices and some very attractive offers appeared on the market. During the second half of 2009 sales already made up 40% of the total number of deals in the area, property sales in Varna rising three times in the second half of 2009.

Russian clients were extremely active as they traditionally like Varna and the region. There were British buyers as well as they mainly bought cheap rural properties. Bulgarian clients preferred to rent properties awaiting lucrative deals.

The average price of the apartments BULGARIAN PROPERTIES sold in Varna in 2009 is 83,300 Euro, which is 22.5% lower than the average price in 2008 (107,500 Euro). Meanwhile, the trend average prices in Varna to be higher than those in Sofia remains as the decrease in the average prices in both cities is similar.

SKI PROPERTIES
http://www.bulgarianproperties.com/Properties_In_ski_reso...

The average prices of the apartments sold in the resort of Bansko (http://www.bulgarianproperties.com/Bansko_property/index.html) in 2009 is 38,700 Euro compared to the 66,000 Euro in 2008 the result being a 41% decrease on an annual basis. This is also a wonderful opportunity for Bulgarian buyers to buy holiday homes at a good price – about 650 Euro/sq.m. on average.

From the end of 2009 the resort of Pamporovo also offers prices from 500 Euro/sq.m. while the prices in Borovets have not decreased by more than 10-15% to an average of 1,400 Euro/sq.m. Due to the low interest in both resorts and the lack of actual deals in 2009 it is difficult to make a comparison to 2008.

PROPERTIES IN SEASIDE RESORTS
http://www.bulgarianproperties.com/Properties_On_the_Sea/index.html

The average price of the purchased apartments in the southern Black Sea resorts in 2009 was 50,000 Euro while in 2008 it was 82,000 Euro – making the annual decrease 40%. The average prices of the apartments sold in the area of Sunny Beach in 2009 was 660 Euro/sq.m. and in Sveti Vlas – about 1,000 Euro/sq.m.

In Sozopol prices remained higher compared to those in Sunny Beach and the surrounding areas which is the reason for the lower interest. The average price of the apartments sold in Sozopol was 1,100 Euro/sq.m.

In Golden Sands the apartments in developments with a unique location were sold at a price similar to that in 2008 - about 2,200 Euro/sq.m. Properties set further from the beach in the resort were sold at prices from 700 to 1,400 Euro/sq.m.

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