The Rental Market in Sofia and Varna - Spring 2009

Polina Stoykova, Chief Operations Manager, BULGARIAN PROPERTIES

In general, there weren’t any considerable changes on the residential rental market in Sofia in the spring months in 2009 compared to the previous months. An analysis of the rental markets in Sofia and Varna shows that potential tenants look for cheaper and smaller apartments. In contrast to Sofia, there is a decrease in the offerings in Varna in the mass segment by about 8 percent in April compared to the previous month while the overall supply has increased slightly. Here are the details:

1. Sofia

The supply in the lower property segment in Sofia has not increased in the last 2 months as there are no considerable corrections in the rental price either – the demand is mainly focused on 1-bedroom apartments at a price of 450-500 Euro. These are the prices at which BULGARIAN PROPERTIES concluded their deals in Sofia in April (the average price in March 2009 was 430 Euro). The downward trend which we witnessed from February to March was followed by retention in the rental prices in April. The demand for apartments for rent in the central and wide central areas has increased.

Currently, there is almost no demand for middle-sized apartments and the supply level is the same as in the previous months which shows that there will be a decrease in the rental prices of this apartment type so that they could be rented out in the next few months.

According to the data of LUXIMOTI – the luxury brand of BULGARIAN PROPERTIES, in the luxury rental segment there is a slight increase in the supply of houses for rent but the interest towards such offers is still low.

The supply of luxury apartments for rent has not changes since the winter with the condition that quite a few interesting offers that had not been put up for rent up to now appeared on the market this spring.

The demand is focused mainly on large apartments with at least two bedrooms and 2 bathrooms, as the properties are located in the central part of the capital. The spring months witnessed an increase in the demand in the luxury segment compared to the first two months of the year mainly by foreign company managers coming to Bulgaria to replace other managers or to support the companies at a time of crisis. This type of clients are quite exacting regarding the quality of the properties, their extras and location as the central part is the preferred area. The rental prices in this segment have also not changed a lot compared to the previous months.

2. Varna

In contrast to Sofia, in April and May in Varna there is a decrease in the number of offered properties in the mass segment by about 8-10% compared to March 2009 while the overall supply has increased.

Tenants look for apartments at a price of 280-300 Euro while in the previous months the demand was at price levels of 400-450 Euro which means there is an almost 30-percent decrease in the price which tenants are willing to pay.

In the last 5-6 months the rental prices of the concluded deals in Varna increased and reached those in Sofia but now the demand is limited to cheaper apartments and there will be a decrease in the prices in the next few months as they will return to the rental levels from before November 2008.

With the beginning of the summer season in the lower segment there will be an increase in the demand of rental properties but it will also be focused on less expensive properties with an average rental period of 2 weeks to 1 month.

Regarding luxury properties according to data from LUXIMOTI the supply of houses for rent in Varna has increased – now there are offers which appear on the rental market for the first time. This spring in Varna there is also an increase in the demand of luxury properties with at least 2 bedrooms, located in the Sea Garden area or in the central part of the city. Here the clients are also mainly foreigners-company managers replacing members of the staff or supporting the local branches in dealing with the economic crisis. In terms of dynamism, in April the luxury property rental market in Varna was more active than that in the lower segment.

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Copyright: 2009 Bulgarian Properties Ltd. All rights reserved. For further information or advice please contact us on tel.: +359 2 9 11 50 or e-mail: info@bulgarianproperties.com. The use of this article by third parties is allowed only with proper quotations of the source www.BulgarianProperties.com and the Author of the article. The data in this material has been collected by the Author and Bulgarian Properties Ltd. and is presented for information purposes only. We have made every effort to ensure the accuracy of the data. However, Bulgarian Properties Ltd. cannot be held responsible for loss or damage as a result of decisions made based on the information presented in this article.
© Bulgarian Properties Ltd. 2009.


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