Boom of the Deals with Agricultural Lands in 2006

Stroitelstvo Gradat Weekly, Mihail Garkov, 22-28th January 2007

The number of the deals with agricultural lands reached 92 000 in 2006 which is an increase of nearly 100% compared to the preceding year, said at a press-conference the Deputy Minister of Agriculture and Forestry Svetla Bachvarova. The growth marked by the market is due to a great extent to the activity of the investment funds focussing on the agricultural properties which are behind more than half of all transactions.

The average market price of the agricultural lands has increased up to BGN 200 per decare that is 20% more compared to 2005.

There is a big increase in the average price of the agricultural land in the north-western regions, as it has reached BGN 162 per decare (40% compared to 2005). The number of the deals in the region has increased by 60%, as nearly half of the lands sold are situated in the region of Vidin, namely 90 000 decares. In the north-eastern region, which remains the most active market in the country in 2006 as well, there are 30% of the deals executed, at an average price of BGN 220 per decare that is an increase by 26% compared to 2005.

During the last year the demand on the territory of the whole country exceeded the offering, which accounts for the increase in the prices and the number of deals. The market intensification is directly connected to the joining to the European Union and to the general agricultural policy of the Union for direct payments per unit of area, said Bachvarova. The stabilization of the market is a result of bringing near the prices in the different regions. The landed funds are also an important factor, as they take part in more than 50% of the deals in 2006.

The European market is extremely conservative regarding the purchase-sale of agricultural land, as there are many serious restrictions. The market price of the properties in Bulgaria is 4-5 times less compared to the average price for the European Union, and most probably it will not become equal in the future 3-4 years according to Deputy Minister Bachvarova. The expected step of an increase in the price of the agricultural land in the coming years will not exceed 10-20%.

According to Bachvarova there is a tendency in 2007 towards a decrease on the market for purchase-sale of agricultural land and strong intensification of renting. There are totally 3.8 million decares granted on lease in 2006. The value of the rent paid in 2006 increased by 20%, which was also the prognosticated increase in the price in 2007. The rents in Bulgaria correspond to 60% of the average value of the rent wanted within the European Union.

There will be a serious increase in the price of the land for non-profit purposes in the coming year. During last year the number of the deals increased by 23% compared to 2005 up to 8596. There are 47 219 decares of land for non-profit purposes sold, which is an increase of 34% to one hundred percents. The average market price remains high, namely BGN 30 543 per decare that is an increase of 7.2%.

The lowest average price has been registered in the north-western region, namely BGN 1134 per decare, followed by the Northern central region – BGN 5261 per decare. There is an increase in prices of 35% registered in the Southern central region compared to 2005 – BGN 8658 per decare.

The activity in the north-eastern region remained in 2006 as well – there was a total number of 14 394 decares of land sold at an average market price of BGN 20 967 per decare, which is an increase of 11% compared to 2005. More than half of all deals are made in the region of Dobrich where the average price is to the amount of BGN 17 000 per decare, and the highest price reported is in the village of Topola, namely BGN 25 000 per decare. The village is attractive for the golf ground under construction, which is situated near it, and the boom of the building of vacation complexes in the region of Kavarna and the region of Balchik. The prices in Varna and Byala are extremely high, as the maximum values per deals there have reached BGN 80 000 per decare.

The number of deals in the south-eastern region remains the same (1334) but the land sold has increased nearly two times, up to 12 326 decares. The average market price decreased by 11% in 2006 compared to the preceding year. The average price of the lands for non-profit purposes on the territory of the Municipality of Sozopol is the highest in the country, namely BGN 190 000 per decare. The maximum price reached in this part of the country is to the amount of BGN 300 000 per decare.

During the past year there was a decrease reported on the market of agricultural lands for non-agricultural needs in South-western Bulgaria. There were 1331 contracts concluded in Sofia City for 4594 decares of land. The average market price increased by 25.8%, reaching up to BGN 76 332 per decare. In the Municipality of “Vitosha” the average value of the land amounts to BGN 112 922 per decare. The prices of land sold in the villa zones near the capital remain high, namely in Bistritsa, Pancharevo, Simeonovo, Boyana, etc.


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