• Increase in the overall number of sales by 3% compared to 1Q 2010;
• Retention of property prices in the capital Sofia, similar to those from the second half of 2010;
• Decrease in average prices in Bansko by 10% and even more in the other ski resorts in Bulgaria and lack of interest in properties in the ski resorts;
• Retention of property prices along the southern Bulgarian Black Sea coast and an increase in the number of concluded deals compared to the same period last year, the main buyers being Russians and from Russian speaking countries;
• Partial return of British buyers looking for cheap rural houses and holiday homes;
• Overall decrease in the sales of rural properties but there is a more dynamic market for more expensive rural houses ready to live in.
The first quarter of 2011 was successful for the sales of apartments in Sofia. On the background of a small increase of 3% in the sales around the country compared to 1Q 2010, the number of deals in Sofia increased twofold.
The most dynamic price segments continue to be the lowest and the highest as deals are concluded at prices up to about 60,000 Euro and over 150,000 Euro. The cheapest apartment sold in the first quarter of 2011 cost 27,000 Euro and the most expensive – 325,000 Euro. The prices per sq.m. at which deals are concluded vary between 500 and 1,100 Euro as the average price at which deals were concluded in Sofia in 1Q was 830 EUR/sq.m. To compare, in the last quarter of 2010 the average price which BULGARIAN PROPERTIES reported was 930 EUR/sq.m. and 1,040 EUR/sq.m. for 1Q 2010.
This means there is a 10% decrease in the average price of the concluded deals with apartments in Sofia compared to the previous quarter, but this is mainly due to the more deals in the lower price segment since the beginning of the year, while in the last quarter of 2010 deals were mainly concluded in the higher price segment. As a whole during the most of 2010 average prices fluctuated between 840 and 870 EUR/sq.m. and based on these values property prices in Sofia remain stable.
The real estate market in Sofia plays a leading role in setting the market trends around the country as it is here that most deals are concluded at the highest prices. The census data of the Bulgarian National Statistical Institute (NSI) shows that Sofia is the city with the biggest population and highest growth in population in the last 10 years. We believe that people will continue to migrate to Sofia in the years to come because the perspective of finding a well paid job here are better compared to the other towns and cities around the country. This influx of people to the capital Sofia will result in property demand. This means the properties that have been on the market for some time will be sold or rented out and in the next couple of years the construction of new buildings in Sofia will become more dynamic.
What is new this year is the increased interest and sales of houses around Bourgas and Sunny Beach. The deals in this region were very few since the beginning of the crisis and even before that as prices were quite high and the supply was limited. This winter season 30% of sales along the southern Black Sea coast are with houses priced between 25,000 and 40,000 – in very good condition, furnished and ready to live in.
There is also more interest in rural houses in the area of Veliko Tarnovo – mainly well maintained and renovated houses that are ready to live in, priced between 20,000 and 35,000 Euro.
The sales of rural houses around the country decreased compared to the previous quarter by about 35% and by 15% compared to 1Q 2010.
The average prices of rural properties sold in 1Q 2011 as per regions is as follows:
• Bourgas region – 33,300 Euro
• Stara Zagora region – 10,880 Euro
• Plovdiv region – 9,200 Euro
• Veliko Tarnovo region – 21,000 Euro
• Montana region – 6,000 Euro
• Pleven region – 3,700 Euro
Buyers as per nationality
The main property buyers continue to be Bulgarians and Russians as Bulgarians are active mostly on the market in Sofia and the other big cities and the Russians – in the beach resorts. In February British buyers started returning as they choose mostly cheap rural houses and discounted holiday apartments in Bansko and in beach resorts priced up to 20,000 Euro.
The other foreign clients of BULGARIAN PROPERTIES come mostly from European countries – Germany, France, Sweden, the Netherlands, Italy, etc.
In conclusion it can be said that the increase in the direct foreign investments in Bulgaria in January compared to a year earlier and the beginning economic recovery of the country give out positive signals to the real estate market. What still has negative effect is the high unemployment rate and people’s insecurity in their income, as well as the global political and natural cataclysms and the Europe’s struggling in dealing with the debt crisis.
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