03.08.2009 BULGARIAN PROPERTIES Advise: Research the Market Well before Buying Off-plan

Polina Stoykova, BULGARIAN PROPERTIES

According to the data of the national real estate agency BULGARIAN PROPERTIES deals with off-plan properties have decreased considerably after October 2008 and this happened almost simultaneously on the Bulgarian and foreign markets.

According to the company, in the last 2-3 months there is already higher activity on the property market which has led to an increase in the deals with finished properties, as in July 2009 there is also higher interest in off-plan properties. The interest in off-plan properties is still in a research stage and is a result of the new lucrative offers marketed by builders and investors. It is a fact that in most cases low property prices in Sofia (around 400-500 Euro/sq.m.) are for off-plan properties.

The main factors which influence the decision for buying off-plan property and which BULGARIAN PROPERTIES advise the buyers to research carefully are the specific offer, the builder and the investor. Some of the main questions in this research are whether the offer is good in view of the market situation, whether the conditions and the payment plan are good, what is the reputation of the builder and the investor, whether financing is provided to the builder and whether the interests of the buyers are well protected in the agreement with the builder. Many of the buyers who need financing for purchasing a property look for suitable payment plans that include minimal payment when signing the preliminary agreement and 70-80% of the price to be paid after receiving Act 15 when banks would be more willing to give a loan to them.

BULGARIAN PROPERTIES cannot predict whether and when the interest in off-plan properties will return because to a big extent the economic crisis is also a crisis of trust. Having also in mind the great number of newly-built and unsold properties in the mass segment the company believe that the market is actually “flooded” with finished properties of good quality for sale. The investors or the owners are ready to make discounts in order to receive fresh capital and there are even deals at prices under the cost price. Now buyers do not have to wait 2-3 years while their property is being built but banks are very conservative when it comes to loans and will finance only finished properties with issued Act 16 (Certificate of Habitation). According to the company these are also the main factors which will hinder the off-plan market in the next few years.

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