Is there optimism on the Bulgarian real estate market

Human Capital, 01.02.2012

Last year prices of properties in Bulgaria fell by an average of 8% year-on-year. This is what the market analysis of Bulgarian Properties shows. To compare, the average price drop in 2010 was 8.3% and in 2009 – 36%. Thus the decrease of real estate prices in Bulgaria is gradually slowing down and real estate agencies hope it will stop this year. At the same time the number of concluded deals around the country has increased by about 15% compared to 2010, the data of Bulgarian Properties shows.

In 2011 the average prices buyers paid for an apartment in the big cities around the country was between 20,000 and 60,000 Euro.

Property prices in the resorts
The real estate agency note the interesting fact that only in the beach resort of Sveti Vlas properties have retained relatively high prices, even during the crisis. Prices there have not fallen under 1,000 EUR/sq.m. in the last 3 years and at present they are higher than even those in Sofia and Varna. “This makes Sveti Vlas stand out as a resort with stable property prices and investment opportunities in quality real estate”, says Polina Stoykova, Chief Operations Manager of Bulgarian Properties.

“2011 was not a very successful year for holiday homes in ski resorts and for those in Bansko in particular”, comments Ms Stoykova. Last year prices of apartments in Bansko fell considerably, by about 25% throughout the year.

The average price of Bansko apartments sold in 2011 was 35,000 Euro while in 2010 it was 42,800 Euro, the analysis shows. This means a decrease of 18% year-on-year. The number of deals in Bansko have also decreased compared to 2010.

Rural properties
”After a stabilization in the interest in rural properties and an increase in the number of deals in 2010, in 2011 the price levels remained similar and there was a small decrease in the number of sales in this segment”, says Polina Stoykova. The buyers were interested in more expensive houses that are ready to live in.

That is in fact one of the main reasons for the increase in the average prices of concluded deals in most regions compared to 2010 and in the regions of Varna and Veliko Tarnovo in particular, the analysis says. Prices of rural houses in the areas of Bourgas and Stara Zagora have remained similar to those in 2010 and in some areas like Plovdiv, Yambol, Kardzhali and Pleven they have dropped. The interest in villages in Northwestern Bulgaria remains weak.

Office space
Last year the average rental price of a new modern office in a top location was between 10 and 12 EUR/sq.m. The total area of office space amounted to 1,478,000 sq.m. after new 163,000 sq.m. of office areas came to the market in 2011. This is what a research of the company Forton International, which is specialized in offering office spaces, shows. The company expects a considerable increase in the number of office deals in 2012. The reason for that is the big number of rental agreements at the end of their 5 year term, which were signed before the crisis.

“With a total volume of 200 million Euro our country falls into Europe’s Top 10 for investment activity increase in 2011”, Forton international comment. “The investors looking for investment opportunities in Bulgaria are mainly high risk funds and entrepreneurs, as the most active are companies from the UK, Greece, Israel and France”.

In 2011 the increase of investment deals in Europe was 7.8% or 126 million Euro, the research shows. The investment volume in Central and Eastern Europe was significantly higher compared to Western Europe – 75%. Apart from Bulgaria the countries of Estonia, Slovakia, the Czech Republic, Hungary, Russia and Croatia also attracted the investors’ interest.

2011 in numbers (as per Bulgarian Properties data)
• 8% average decrease of prices of residential properties in the country compared to 2010
• 15% increase in the number of concluded deals with properties around the country compared to 2010
• 10% decrease of prices of Sofia apartments. The most sought after apartments are those up to 50,000 Euro
• Decrease in the prices and number of sales in the resort of Bansko
• 6% decrease in the average prices of sold apartments in Sunny Beach and a 20% increase in the number of sales
• Prices of rural houses returned to their 2005 levels, but now there are 90% less deals
• The average price of concluded deals with rural properties in 2011 is 15,900 Euro. Increase of 37% compared to 2010
• Decrease in deals with rural properties of 8% in 2011 year-on-year

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