Small, "fast moving" buildings replacе large projects

The new construction in Sofia continues decreasing and started buildings have less apartments, the housing statistics reported quarter after quarter. Recently built brick mastodons smelt to small buildings with one or two entrances and 10-15 apartments.

The reasons are different – no buyers, entrepreneurs do not want to risk and banks heavily finance large projects. However the direction is one - increasingly limited supply of new homes. And this after years of a boom of panel and brick construction looks more normal.

Indeed, it was confirmed by the register of building permits on the site of the department "Architecture and Urban Planning" of Sofia Municipality – large projects are disappeared from the market.

Since the beginning of the year to July there is no a building with known from the past areas over 10,000 sq.m., which has received a building permit. The approved projects are with a total build-up area around 1,000 sq.m. – 1,500 sq.m and a few projects are with a total build-up area of 4,000 sq.m. - 6,000 sq.m. - one of them is located in Sofia district - Druzhba, one in Mladost neighbourhood and one in Bakston district.

The trend is shown also from the data of the National Statistics Institute (NSI) for issued building permits. Since 2009 not only less buildings have been building, but smaller and with a limited number of apartments in them. "Investors are withholding. There is a change depending on a demand and these things are normal in time," said the expert from the NSI Stanka Dimitrova.

Major reason of the decreasing construction volumes is more difficult providing of funding. The rising interest rates on bank loans and difficult sales forced many developers to rely mainly on their own resources. Even those who borrow, aiming to invest in projects at least a half of the capital with own funds. All this radically changed the model of construction and housing sales.

"Years ago, the construction of large buildings and complexes were launched easily, it was enough to have a suitable terrain. The apartments were sold off-plan and the construction projects were financed by received money. So the large scales were not a problem, even contrary – the developers were looking for a maximum build-up area from the plots in order to sell more apartments, said the Chief Operations Manager of real estate agency BULGARIAN PROPERTIES Polina Stoykova.

According to her large projects are going well at the time when the housing needs have to be meet quickly. Such was the panel construction in major cities during the socialism as well as during the boom on the real estate market after 2003. But now the situation is opposite – the demand is weak, there are no off-plan sales and now the small projects are in demand. For developers they provide faster completion of the construction, sales and output of the investment.

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