Bulgarian property prices see first quarterly growth since crisis

Bulgarian property prices recorded their first quarterly growth since the start of the financial crisis, according to new figures. Research by Bulgarian Properties, based on data from the National Statistics Institute, shows apartment values rose 0.74pc in Q2 2013 compared to Q1.

The figures are adjusted for inflation, presenting a more accurate representation of the actual change in values. Indeed, this “real growth” in prices is the first time that a quarterly increase has been recorded since the beginning of the financial crash in 2008.

“We can see that the property market in Bulgaria has reached a state in which nominal prices remain unchanged, and after inflation deduction, they seem to have started to register small positive changes,” comments Polina Stoykova, Head of Research for Bulgarian Properties.

If these first hints of growth continue, they could mark the start of a slow recovery from a market bottom in Bulgaria. Slow is the key word, though: apartment prices in the second quarter of 2013 are still 3.18 per cent below 2012.

Nominally, not taking into account inflation, the drop is less severe, with apartment prices now 2.15 per cent below the same period in 2012.

Sofia remains the most expensive city in the country with values at €734 per square metre between April and June 2013. Sofia is followed by Varna, Plovdiv and Bourgas in terms of price. Within the capital, apartment prices edged up 0.9 per cent quarter on quarter and recorded an even smaller 1.52 per cent annual dip. Adjusted for inflation, apartment prices in Sofia have risen 1.71 per cent quarter-on-quarter.

The slight improvement in prices has been accompanied by the return of local buyers to the Bulgarian real estate market.

In April, at the start of the second quarter of 2013, demand for Bulgarian property on TheMoveChannel.com also increased, as the country climbed four places in the Top of the Props chart to become the 11th most popular destination in the site. Since then, though, interest in Bulgaria has dipped on the portal, as the country slid to 17th place in July.

Supporting the values in the most expensive cities, Bulgarian buyers’ interest remained focused on Sofia and Plovdiv in the second quarter of 2013. Varna and Bourgas were popular with Russian buyers, who remain the major overseas investment demographic.

“Beach properties continue to dominate and take the largest share of holiday property sales,” explains Bulgarian Properties’ report. Indeed, the seaside holiday market saw a boost in activity at the end of 2012 and that level of demand has remained consistent throughout 2013 so far.

“The volume of the concluded deals in 2013 remains at the levels from the second half of 2012... and a start of a new cycle in its development,” adds the report.

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