15.07.2010 Analysis of the Bulgarian Real Estate Market 2Q 2010: The Market Gives Diverse Signals, Discounts on Properties Decrease


In the second quarter of 2010 the Bulgarian property market gave very diverse signals. After 6 months of a similar number of deals the month of March witnessed an increase in the deals and there was optimism that this is the beginning of the end of the crisis. The increase in the number of deals continued all through April as BULGARIAN PROPERTIES registered record sales since the beginning of the crisis. However, after that about 10% of the buyers who had signed preliminary agreements for purchasing a property decided to back out of the deal due to lack of finances and an increased insecurity about their financial situation.

May was a very slow month with a 60% drop in the number of deals around the country compared to April. In June sales returned to levels close to those from March and April but also close to June 2009 which was one of the best months for the real estate market last year.

This market situation is very different compared to each of the previous months and this makes us think that the recovery will not be as stable and as smooth as we forecasted earlier. The next few months will be of key importance for the direction in which the market will go until the end of the year.

For already a year now the property market shows similar activity, it stays at one level and does not develop. The only sign of progress was when prices decreased in 2009. The first two quarters of 2010 also give different signals – decrease of the asking prices and the prices of the actual concluded deals in the first quarter and then a return to the 2009 levels of the asking prices and prices of actual concluded deals in the second quarter. This means that in terms of activity and prices the market is in the same position in which it was last year.

Our observations of the real estate market show that although it consists of less liquid assets it is extremely dynamic and reacts immediately to all economic and political trends and news. The insecurity connected to the anti-crisis measures, the tax policy, etc. had an immediate effect on the property market in May. Regarding demand of properties in Bulgaria from foreign buyers – it also fell significantly in May as a result of the news about the crisis in Greece and the threats it poses to the European economy. All this means that if the economic situation becomes worse, it would have a negative effect on the property market.

Also the property market is closely connected to the trends on the Bulgarian Stock Exchange (BSE). In May the BSE indexes registered record low levels. The same thing happened on the property market – record low number of deals, similar to that in the beginning of the crisis.

The total number of deals in the second quarter of 2010 compared to that of 2009 increased by 23% and for the first six months of 2010 the number of deals increased by 46% compared to 2009. This is due to the stabilization of the market in the second half of 2009 and the weak first months of 2009.


1. City properties in Sofia and Varna

1.1. Residential property sales in Sofia

The average price of the sold apartments in Sofia for the second quarter of 2010 is 870 EUR/sq.m. which is the lowest price our company has registered since the beginning of the crisis. Prices have decreased by 16% compared to the first quarter when the average price was 1,040 EUR/sq.m. based on actual concluded deals. In the second quarter of 2009 the average price per square meter based on sold apartments in Sofia was 1,020 EUR/sq.m. This means that now we have a decrease of about 15% on an annual basis.

The average price of the sold apartments is 86,000 Euro. A year earlier the apartments in Sofia were sold at an average price of 66,000 Euro, as what was bought most were small apartments with an area of about 60 sq.m. at a price of 1,020 EUR/sq.m. This year buyers spend bigger budgets on properties in Sofia as they buy bigger apartments with an area of about 100 sq.m.

In the first quarter of 2010 it was mostly apartments in the luxury segment that were bought as their average price was 119,300 Euro with prices per sq.m. of 1,200-1,400 Euro. In contrast to the first quarter, in the second quarter about half of the deals were in the lower price segment with an average price of 35,000 Euro with prices per sq.m. of 500-600 Euro.

The volume of sales in Sofia remained stable in the second quarter of 2010 as well – it is similar to that from the fall of 2009.

1.2. Rental levels of residential properties in Sofia

The average rental price of a Sofia apartment for the second quarter of 2010 is 480 euro. There is an increase in rental levels compared to the first quarter of 2010 – from an average of 400 Euro which makes an increase of 20%. Meanwhile, the rental market in Sofia registered a 26% drop in the number of deals compared to the first quarter of 2010.

1.3 Residential property sales in Varna

The residential property market in Varna registered some stir at the end of last year and the beginning of 2010 but it did not reach the more dynamic market in the capital Sofia. The main part of the sales of apartments is in Varna and the neighboring resorts. This means that more holiday homes are sold at bargain prices than residential properties in the city of Varna.

1.4 Rental levels of residential properties in Varna

The average price at which apartments in Varna are rented in the second quarter of 2010 is 420 Euro – about 10% higher compared to the first quarter which is only logical in view of the increased demand and the beginning of the summer season. The increase in the number of realized rental deals compared to the first quarter is over 100%. In the luxury segment there is also higher activity and rental deals are concluded at prices of over 1,000 Euro/month. Prices of apartments rented short-term are about 50 Euro/night.

2. Holiday homes

2.1. Seaside holiday homes

Since March the interest of foreign buyers in Black Sea properties has been increasing as this is due to the beginning of the summer season. Quite a few of the potential clients combine their holidays to Bulgaria in spring and summer with a viewing trip and that is the reason there to be more viewings in the last couple of months.

Potential buyers of seaside properties are mainly interested in cheap apartments between 25,000 and 40,000 Euro. The average price per sq.m. based on actual concluded deals with seaside properties is between 350 and 700 EUR/sq.m. The number of deals with seaside properties remains the same as in 2009. This is also true for prices of properties in seaside resorts – during the second quarter of 2010 there is no change compared to the prices in the first three months of the year.

There is also interest in luxury and elite seaside properties whose prices vary between 80,000 and 130,000 Euro. The truly luxury properties in Bulgaria (a very small percentage compared to those which are already built) will soon become a separate investment product. They will not be influenced by the general trends and market fluctuations and will make one of the best investments.

Meanwhile, foreign owners of seaside apartments continue to sell their properties as they are willing to offer bargain prices in order to make a fast deal. Since the beginning of 2010 many developers also decreased the prices of their seaside properties as there are already asking prices as low as 300 EUR/sq.m. for apartments in finished developments. Most of holiday home sellers agree to part with their properties at very low prices as almost all of them are selling under the cost price or under the price which they paid some years ago.

2.3 Bansko

Almost for a year now average property prices in Bansko remain at about 650 EUR/sq.m. (with average levels before the crisis of 1,300-1,500 EUR/sq.m.). After the significant price drop last year prices of Bansko properties remain stable.

The lowest prices in Bansko start from about 500 EUR/sq.m. for finished unfurnished apartments. In the last year the average budget for an apartment has been between 30,000 and 50,000 Euro. In the last 3 months the interest in Bansko gradually decreases and focuses on the seaside resorts, which is part of a typical cycle for this type of properties.

Our main piece of advice when choosing a holiday home is for buyers to choose the development carefully – it must be finished, with a good location and excellent quality, it must be ran by a renowned property management company and must be rented out to tourists; there must also be additional extras for the tourists like a pool, a SPA center, a tennis court, etc.

3. Rural properties

The average price of rural properties sold in the second quarter of 2010 is 14,600 Euro which is similar to the average price in 2009 – 14,300 Euro. There is an increase in the average price of rural properties compared to the first three months of 2010 of about 50% - then it was 9,640 Euro. This means that the price decrease in the first quarter disappeared in the second.

The other interesting thing on the rural property market is that there is a significant growth in sales of 70% in 2010 compared to 2009. This is due to the fact that in the beginning of 2009 the rural property market was at a standstill.

In most regions price decrease is minimal compared to the average levels in 2009 and is much less compared to the bigger price decrease in the beginning of 2010. There are regions in which prices have increased slightly but this is valid for well kept properties – for example in the region of Pleven where prices were lower compared to the average prices around the country.

In the regions of Varna and Dobrich rural house prices have not changed, like in most regions. However, prices of rural properties in the region of Vidin continue to fall compared to 2009; rural properties around the city of Bourgas are sold mainly in the area of the town of Karnobat, as they are cheaper - the average price being 9,000 Euro.

In the last 2 months the share of Bulgarian rural property buyers has increased by about 10%.

Average prices* of rural properties sold in the second quarter of 2010 as per region and percent change compared to average price levels in 2009:

• Regions of Varna and Dobrich – 14,750 Euro – no change from 2009
• Region of Bourgas (in the area of the town of Karnobat) – 9,000 Euro
• Region of Plovdiv – 15,956 Euro -1.5%
• Region of Stara Zagora – 12,870 Euro -5%
• Region of Veliko Tarnovo – 11,050 Euro -4%
• Region of Vidin – 5,120 Euro -27%
• Region of Montana – 4,000 Euro –17%
• Region of Pleven – 6,800 Euro +42%
• Region of Yambol – 12,400 Euro -4%

* The average prices for 2009 and 2010 are formed based on actual concluded deals with BULGARIAN PROPERTIES clients.

BULGARIAN PROPERTIES’ statistics shows the following:

Average price of the concluded deals with rural properties for the second quarter of 2010: 14,600 Euro with average price in the first quarter - 9 640 Euro

Average price of the concluded deals with rural properties for first half of 2010: 11,400 Euro

Price increase in the second quarter compared to the first quarter of 2010: +52% - return to price levels in 2009

Price increase in the 2Q compared to 2009: +2%

Accumulated decrease of average prices of rural properties in the first half of 2010 compared to 2009: -20%

Increase in the number of rural property deals in 1Q 2010 compared to 2009: +70%

2. Fluctuation of average prices of rural properties through the years:

Average prices and growth/decrease compared to the previous year:
• 2004 – 11,300 Euro
• 2005 – 15,450 Euro +37%
• 2006 – 18,510 Euro +20%
• 2007 – 24,800 Euro +34%
• 2008 – 30,800 Euro +24%
• 2009 – 14,300 Euro -53,5%
• First half of 2010 – 11,400 Euro -20%

3. Decrease in property asking prices

The decrease in asking prices is already slowing down. In the last 3 months there are discounts only for properties which were sold at higher prices. There are newly discounted properties, but the discounts are lower.

In the first quarter of 2010 the asking price discount was 5% while in the second quarter our statistics shows that the average asking price discount decreased by 4%, which means that prices are back to their 2009 levels.

There is no change in the asking prices in Sofia – prices of properties for sale decreased by an average of 21% from their highest levels, as this percentage was the same in the first quarter. The same goes for the properties in the different quarters around the capital – there is no discount in the asking prices as per residential quarters.

Meanwhile, based on actual concluded deals, prices in Sofia have fallen by 16% in the second quarter compared to the first. This means there might be a new discrepancy between asking prices and those on which deals are concluded, especially if the market heads for a second fall.


Bulgarian clients still make up 20% of all BULGARIAN PROPERTIES clients, like in the first quarter of the year. They mainly buy apartments in Sofia, Bourgas, and Varna but also in Bansko, along the seaside and rural houses at bargain prices around the country.

Russians are the second biggest group of buyers of properties in Bulgaria (20%) as they buy mainly holiday homes at bargain prices.

British buyers are less than the Russians – 15%, as they buy mainly rural properties.

April and May witnessed a comeback of Greek buyers – about 5% from all foreign buyers for those months but in June they disappeared from the market.

We continue to attract buyers from various countries – USA, Canada, Australia, China, Japan, Spain, Finland, Belgium, Norway, Germany, etc. This indicates that Bulgaria is on the foreign investment map and if investment perspectives here are good there will be interest in the future as well. This shows that the Bulgarian market is not a closed market but depends on a number of external factors and is part of the global property market.

Copyright: 2010 Bulgarian Properties Ltd. All rights reserved. For further information or advice please contact us on tel: +359 2 9 11 50 or e-mail: The use of this article by third parties is allowed only with proper quotations of the source and the Author of the article. The data in this material has been collected by the Author and Bulgarian Properties Ltd. and is presented for information purposes only. We have made every effort to ensure the accuracy of the data. However, Bulgarian Properties Ltd. cannot be held responsible for loss or damage as a result of decisions made based on this article.
© Bulgarian Properties Ltd. 2010.

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