04.07.2008 Financial Crisis Bypasses Southern Balkans Property

24 Chassa Daily, vol.181, 03.07.08, excerpts

It looks like the mortgage crisis which started in the second half of 2007 has not affected the real estate market in Bulgaria, Romania and Serbia. This can be proved with the rate of real estate price increase.

Only in the last few weeks did experts start talking about retention of prices and even about a small decrease in some areas of Sofia. According to analyzers the reason is the increase in mortgage loan interest rates.

As a whole the pace of the price increase of Sofia property compared to Bucharest and Belgrade is the slowest. The price of one-bed and two-bed apartments set outside the center of Sofia has increased significantly – by about 36%. This type of property is the most sought and the increase in the price is only logical.

On the other hand, in the last 12 months the prices of one- and two-bedroom apartments in Bucharest have gone up between 40-46%.
The supply and demand of two-bed flats quickly catches up that of the one-beds the reason being that a lot of foreign developers appeared on the market.

The real estate market in Bucharest, like in Sofia, will continue to develop this year though experts do not expect to see the same fast pace of development.

In Belgrade the increase of real estate prices is relatively low. A year and a half ago there were no clear regulations regarding the acquisition of land. But the local authorities managed to quickly draft a new town-development plan which answers the questions of businessmen who have decided to invest in real estate there.

In the last 12 months the increase of real estate price in Belgrade reached about 30%.
In contrast to Sofia and Bucharest where it is the prices of one-beds that increase most in Belgrade the price growth of studios and two-beds is faster than that of one-beds.

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