BULGARIAN PROPERTIES Co-Owner Nikola Stoyanov: I Can’t Lie That Property Prices Are Going Up

Trud Daily, Vol.192, 14.07.10

Nikola Stoyanov is the founder and co-owner of BULGARIAN PROPERTIES. The new market analysis of the company for the second quarter of 2010 caused a stir and sharp reactions on the part of the chairs of the National Real Estate Association (NREA) and the Bulgarian Construction Chamber. The chiefs of guilds accused the agency of manipulation because of the data it came out with that there were 60% less deals in May compared to April and because of the forecast that property prices might fall further in case of a negative development of the economy.

- Mr. Stoyanov, you were accused by two Bulgarian branch associations. Firstly, you vexed them with your data that the concluded deals in May were 60% less compared to April. Is this data true?
- Yes, it is true. In our report we speak of the deals our company has concluded. April was a very good month, there were more deals concluded in all market segments. But in May, when there was already talk of Greece’s debt crisis and of a crisis in other countries, the situation changed. I never believed that the market could be so sensitive to this kind of news, to react so fast. People are reluctant not because they do not have money. On the contrary, the deposits have increased in the last year, as households do not spend but save. Meanwhile, the consumption decreases, an example being car sales. The problem is not that people don’t have money but that they have lost their trust, they don’t know what will happen tomorrow.

- NREA think that this way you increase the distrust in the market.
- This is the data of our company. Everything is true and we are backing it up. I cannot lie that the number of deals or prices have increased. After our analysis two other companies published their reports, as they also mention that the market is chaotic.

- Your forecast of a possible new recession was the other thing that incited the strong reaction…
- Our analysis reads that if the economic situation in Bulgaria and around the world continues to get worse a second decrease could be expected in the real estate sector. We did not make a definitive forecast that whatever happens the market will worsen. It is important to read the whole analysis and not take out some sentences from the context and analyze them. If the economy does not improve the property market will not improve either. But if things start to get better the market will catch up fast.

- How do you explain the fact that you provoked such a stir in the branch?
- I guess that they made more deals, their sales increased together with the prices of the sold properties. If they experienced such a growth then they should say it out loud. I say we did not experience any growth although we trade in all residential property segments – city properties, luxury properties, holiday properties, rural houses, etc. Why should we keep the facts to ourselves? Our clients are informed about what the current situation is. They follow closely the economic situation in Bulgaria and around the world. And they react immediately both to good and bad news.

- If the market is that chaotic what has been happening so far in July?
- For the first two weeks of July we have a 20% increase in the number of deals around the country compared to July 2009. This is also true for Sofia. This increase is mainly due to the more attractive prices, to the favorable mortgage conditions and to the deals with holiday homes with foreigners. The stress from the difficult month of May has disappeared. The market is returning to a normal number of deals for the period but is far from the peak from 2007 and 2008. What is typical for July is that deals are difficult to conclude, there are concluded after many viewings and talks between the parties. Almost in all deals buyers want and most often receive a discount of 10-15% from the asking price. Deals are hard to conclude mainly due to the stress and to the unclear future regarding the economy and people’s income. Tension is backed up by the negative economic news. It has immediate effect on the demand and the buyers.

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