Land become best selling property not only in Bulgaria

Although there is three months to the end of the year, currently we can certainly say that the agricultural land is a bestseller on the property market. Reasons for this are in economically and psychologically prospects. First, the income from agriculture has grown mainly due to subsidies from the European Union and they will continue rising. This lead to collection of enough capital by tenants to start investing in land, trying in this way to avoid depending on owners.

Increasing of the rent income by a record 23 percent in 2011 compared to 2010 showed that despite the fragmentation of plots, owners are now looking for better payment and tend to transfer their properties to another tenant, and this obstruct the operation of farmers. Therefore, the purchase of land ensures that farmers will cultivate land without any risks.

The rents for this year will also be increasing, but not more than 10 percent. Of course, in areas where competition is particularly high - Dobrudzha, Central Northern Bulgaria - they can grow 12-15 percent.

For a while there was a variation in this segment of the market, but from 2004 the deals have been increasing until now. The only exception was in the worst crisis year – 2009, when the sold decares were under 1 million - 860,000. However in 2010 the sold decares have exceeded over one million and in 2011 have reached a record of 1.35 million decares. Forecast for 2012 - the deals will reach 1.5 million decares, while a boom is expected in October and November. Then the farmers will have already reaped and sold their crops and they will focus all their spare money to purchase land, which they are cultivating under a lease.

Fertile soil in Dobrudzha remains the most expensive, according to concluded deals at a notary. As of early October, offers of land in Dobrich region, included in the national network "Earth", have reached 2,000 BGN per 1,000 sq.m., although the actual deals are concluded at a price of 1400-1500 BGN, real estate agents in the region said. The price is determined by two factors - the size of the plot and the financial opportunities of the tenant.

Cheapest agricultural land is located in north-western Bulgaria, but the prices are average over 450 BGN per 1,000 sq.m. The number of sales in the north-western Bulgaria is about four times less. But according to the recent sales, appreciation trend will not pass this region - the average price of the last offers are 650 BGN per 1,000 sq.m.

Prices in Plovdiv region are different. You can find very expensive land, rivalling Dobrudzha, and much cheaper, almost to the level in the north-western part of the country. For example, when the plot comes with water and it can produce vegetables, it gets more expensive twice compared with others. The average price in the Plovdiv region is about 750-800 BGN per 1,000 sq.m.

Growing interest towards agricultural land is shown not only in our country. Large investors disappointed by shares and commodity futures, have turned to such deals. Pension funds, especially American, which have sufficient assets, buying more good agricultural land and the results of the invasion, which began before 2009 are now available. It is a fact that the land provides high liquidity, if needed, and not only hold their prices, but steadily upwards. Land, which can be used for producing food, is becoming scarce, because of the increasing population and depletion in intensive farming and climate change.

In several states in the USA the prices of agricultural land have grown over the past year to record levels. Growing demand for food in developing countries and increased use of land for biofuel production lead to increasing of the investments in agricultural land.

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