There is also a considerable increase in the number of deals on a monthly basis compared to December 2010 and so January 2011 is one of the strongest months on the property market in Sofia in the last two and a half years.
This is a very good sign for the real estate market in Bulgaria in general as the trends in Sofia are indicative of the market in Bulgaria as a whole. Also, the recovery of the market is to start from an increased sales volume.
What apartments were bought in January 2011:
- studios and one-bed apartments at an average price of 48,000 Euro
- two-bed apartments priced between 75,000 and 80,000 Euro
- luxury apartments priced between 120,000 and 300,000 Euro
As it can be seen from the data from last month there is interest in different types of apartments as the greatest demand was for one-bed apartments priced up to 50,000 Euro.
Affordability of apartments in Sofia
Analysis of BULGARIAN PROPERTIES based on data of the National Statistical Institute (NSI) about the prices of Sofia apartments, after deducting the inflation the result is that in 2010 prices of flats in the capital returned to levels that are a little bit lower than those in 2005. Meanwhile, people’s incomes based on the average salary of 1 employed person in 2010, after deducting the inflation, are about 65% higher compared to those in 2005. This means that apartments in Sofia are now much more affordable for local buyers compared to 6 years ago.
In 2005 people could buy about 0.4 sq.m. of an apartment in Sofia with their monthly salary, while in 2010 – about 0.5 sq.m. because prices fell and salaries continue to increase. For example, an apartment of 70 sq.m. in 2010 would be paid with 132 monthly salaries or for 11 years. In 2005 one needed 175 monthly salaries or 15.4 years to purchase the same apartment.
At the beginning of the last decade to buy the same apartment in Sofia one needed 107 monthly salaries or about 9 years. The lowest purchasing power was registered in 2008 during the price peak – 0.3 sq.m. could be bought with a monthly salary or 233 monthly salaries which means one had to work 19.5 years to buy an apartment in Sofia – almost double the figures registered at the moment.
According to NSI data prices of Sofia apartments dropped by 32.6% from their peak values in 2008. The data of BULGARIAN PROPERTIES shows a decrease in prices in Sofia of 30.8% compared to their highest values in 2008. From the second half of 2010 till now the drops in prices of Sofia apartments are insignificant and there is now a clear trend that the price decrease is ending. Buyers have noticed this as most of them now think that now is the right time to buy.
According to NSI, for the period 2000 - 2010 the accrued nominal growth of prices of Sofia apartments is 171% and after deducting inflation - 51.68.
Perspectives before the real estate market in Sofia
We believe that Sofia will continue to receive migrants from other parts of the country because the possibilities for finding a well paid job here are considerably more compared to the other settlements around the country. This influx of people to the capital will keep the market dynamic and will generate demand. The people coming to the capital will be mainly active and educated persons who prefer Sofia because they can find a prestigious job here and receive a good salary. Moreover, more and more businessmen migrate to Sofia and it is exactly this type of active and educated people who drive the market, because they can afford to buy. What can be noticed is that the property market in the country is at a standstill while in Sofia it is very active.
In January the Bulgarian Stock Exchange increased by 15% and the upward trend continues. The turnover has also increased considerably. Investors have started returning to it. As it is considered that the exchange is an indicator of the future of the other economy sectors we could conclude that the trends are positive. This might encourage property buyers in Sofia who had been postponing their purchase in the last 2 years.
According to data of BULGARIAN PROPERTIES’ subsidiary LUXIMOTI (http://www.luximoti.com/
Apartments for sale in Sofia:
The whole report about Sofia Apartment prices is available on the following link:
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