27.01.2009 Annual Report on the Bulgarian Property Market 2008/2009
Polina Stoykova, Chief Operations Manager, BULGARIAN PROPERTIESNational Statistics Institute's figures support our market overview.
2008 – less deals at increased property prices with 26%. 2009 – the time for property buys at reasonable prices. This is how the market can be described in general.
Contact the author of the analysis
PRICE VARIATION AND AVERAGE PROPERTY PRICES IN 2008
2008 was the year of the great expectations that the credit crunch, which later grew into financial, will not affect Bulgaria and if it affects the country, it will not be to a great extent. That is why in the first nine months of the year there were almost no disturbances on the property market and good deals were concluded. However, the last three months of the year turned out to be critical for the real estate market and for the Bulgarian economy as a whole and this brought serious negative impact on the property market. During these 3 months the market almost came to a standstill which was mainly due to the delay in the decision-making for buying/selling a property. Buyers and sellers turned into tennants and landlords waiting to see what the new year will bring.
The prices of the property deals in 2008 grew with 26% on average compared to those in 2007. The upgoing trend of the market slowed down in October to such an extent that no actual price statistics could be made but we can nevertheless say that the prices of the deals concluded in the last 3 months of the year decreased by 15-20% compared to those of the first nine months of 2008.
The higher prices of the concluded deals were determined by the buyers’ preferences for properties of higher quality and standard. This trend in the property demand started in 2008 and continues in the new year. Apart from the demand for properties in the highest-price segment, 2008 was also a time when there was demand in the lowest-price segment. There were almost no deals concluded in the middle-price segment.
The number of real estate deals decreased by 40% in 2008 compared to 2007. This is what the statistics of BULGARIAN PROPERTIES shows. The decrease in deals varies according to the region. The sales in Bansko, Pamporovo and Borovets are 80% less compared to 2007. The decrease in the Black Sea resorts is about 30%. All this led to a correction in prices and currently there are very attractive offers in Bulgaria’s winter and summer resorts which are suitable for a long-term investment.
In Sofia the reduction in the realized deals is 33%, in Plovdiv – 50% and in Bourgas – 31%. There are regions like Vidin where the decrease in deals in 2008 was only 15% compared to 2007.
The average prices of properties bought in Sofia have increased by 18.5% on average compared to 2007 as the greatest increase was in the third quarter of the year followed by a standstill in sales and withdrawal of buyers which on its part led to a 20% decrease in the prices of the deals concluded in the last quarter of 2008. The average price of the properties bought in Sofia in 2008 is 96,200 Euro. The properties in the towns and villages around Sofia were sold at around 29,500 Euro.
The average price of the deals which were concluded in Varna is 107,500 Euro. The properties in the villages around Varna but not at the seaside were sold at an average of 31,300 Euro. There was an increase in property prices both in Varna and the surrounding towns and villages from January until the middle of the year. This increase slowed down and ceased altogether in the last few months of 2008 and as a result some of the developers adopted a policy of price cut or Christmas and New-Year promotions.
The apartments in Plovdiv were sold at an average price of 50,800 Euro and the rural properties close to the city – for about 17,300 Euro which is an increase of 24% compared to rural property prices in the area in 2007.
The average price of the properties sold in Bansko is 66,000 Euro, in Pamporovo – 77,000 euro, in Sunny Beach and in the resorts south of Bourgas the average price is 82,000 Euro and for those along the northern Black Sea coast – Golden Sands, etc. – about 110,000 euro. The data show that the preferences of those who wanted to buy holiday homes were towards luxury properties in developments offering more amenities, close to the ski slopes or to the sea, which defines the higher prices of the deals on the background of the falling prices of holiday homes in the unattractive parts of the resorts.
The average prices of the rural properties have not changed much compared to 2007. For rural properties located to the west of the sea in the Bourgas area the buyers paid 28 800 Euro on average. In the Vidin area rural properties were sold for about 12,500 Euro and the properties around Veliko Tarnovo – for about 14,200 Euro. To the southeast, in the popular with the foreigners Elhovo area, the properties were sold for 16,300 Euro on average.
THE MOST PREFERRED AREAS BY BULGARIAN PROPERTIES’ BUYERS
In 2008 BULGARIAN PROPERTIES concluded most deals in the area of Bourgas – including Sunny Beach and the other resorts in the area, followed by the cities of Sofia and Varna and the Plovdiv area.
Once again the most preferred properties in Sofia were those in and around the central area and the quarter of Lozenets followed by properties in the residential quarters along Bulgaria Blvd. as well as in the southern quarters of Boyana and Dragalevtsi.
As for the seaside resorts the buyers still prefer areas around Sunny Beach and Sozopol and Lozenets. However, what is typical is that there are almost no deals in the properties with bad location and far from the sea despite the fact that last summer we witnessed prices as low as 450-500 Euro in such areas of Sunny Beach. The buyers are already looking for first-line properties or for such that are not more than a five-minute walk from the sea.
Though with more expensive properties the resorts along the northern Black Sea coast also attracted a considerable number of buyers – both Bulgarian and foreign.
In the rural properties section BULGARAIN PROPERTIES’ buyers were most interested in the areas close to Plovdiv and Stara Zagora – there are a great number of well developed villages to be found there offering a good standard of life close to the cities. The rural properties close to the sea and around Varna and Bourgas were also quite popular with the buyers in 2008.
Together with the Bulgarian buyers, who traditionally contribute to about half of the real estate deals, the UK buyers still made up a big percentage of BULGARIAN PROPERTIES’ deals for 2008, though their number has decreased from 50% in 2007 to 30% in 2008. Their preference areas were those around Plovdiv, Stara Zagora, Montana, Vidin and Elhovo.
The Russian clients also made up a large part of the buyers of BULGARIAN PROPERTIES as they invested mainly in luxury properties in the big Black Sea resorts.
There is no other clearly marked nationality among the buyers. Representatives of almost all European and countries from all over the world have bought properties in Bulgaria.
PROPERTY DEMAND IN THE LAST 3 MONTHS
The buyers are still waiting to see what direction the market will take but they have expressed their interest in apartments in Sofia, Varna, Bourgas and Plovdiv. This applies mainly to Bulgarian buyers. What is interesting is that a considerable part of the demand is also focused on rural properties which are close to the sea, in mountain areas and around the big cities in Central Bulgaria.
The foreign buyers are very different in their preferences – they are interested both in luxury properties in Sofia, Varna and the resorts and in cheaper ones around the country, looking for good deals.
An interesting fact is that when it comes to the price the supply and the demand still can’t meet – the buyers look for properties 15-25% cheaper than the offered ones and deals are concluded only if the sellers agree to make a discount.
2009 FORECAST OF BULGARIAN PROPERTIES
We will witness an overall change in the market’s situation which could open up very interesting possibilities for property investments if one acts sensibly and pragmatically.
It would not be right for one to make an explicit forecast of real estate prices in 2009 as there are too many factors involved in the equation like bank lending, the labor market in the country, people’s mindset influenced by the financial crisis, etc. all of which influence the property market greatly.
The main trends will be:
• Property prices will not increase. It is most likely that the prices of quality properties will retain their current levels while the prices of properties that are of bad quality, with bad location, the Soviet-type blocks and some of the holiday homes will decrease to a certain extent.
• The clients will become more and more demanding towards the quality and the parameters of the properties they seek.
• New construction will be reduced to a minimum and not many developers will stay in the business.
• Many of the building projects will be on stand-by or will not be started at all. There will also be such which will be put on hold and will remain unfinished.
• The price of standard development land will decrease significantly. This will also be valid for the compensations.
• The market will work in favor of the buyer and the sellers will be more disciplined and inclined to make discounts.
LOCAL FORECASTS BY OUR REGIONAL MANAGERS:
Svetoslav Drumev, Manager of Sofia City Office:
Buying property in Sofia in 2009 will once again be a wise investment. The processes which we have been witnessing in the last few months on the property market – mainly result of the global financial crisis, will “unstop” the market to a certain extent. Both the sellers and the buyers will sober up. The result will be that only the good projects will remain on the market which on its part will increase the quality of the offers. I think that the investment in quality property is absolutely justifiable and sensible. The prices will gradually stabilize themselves and will slowly increase around the middle of the year as this trend will be kept until the end of 2009.
Evgeni Zlatev, Manager of Varna Office:
In 2009 the share of property buyers from Russian-speaking countries in the area of Varna will be the same but their requirements towards the parameters of the property will increase. The share of the Bulgarian buyers will decrease due to the complicated lending procedures. The prices of properties in the outskirts of the city, in the old buildings and in the Soviet-type blocks will decrease while properties in the top center of Varna will retain their prices which are likely to increase in the next couple of years. The share of rents compared to sales will increase. There will be a decrease in the number of properties sold off-plan due to uncertain financing on the part of the developers and to the finishing of the projects and due to the increased supply of finished quality apartments. This will lead to an increase in demand for finished apartments.
Nevena Tsvetkova, Manager of Bourgas Office:
The main driving force of deals in the city of Bourgas is the purchasing power of the Bulgarian buyers and the demand on their part. The demand has decreased in the last few months which is mainly a result of the buyers’ expectation of big price reduction and the possibility of striking a very good deal. However, for the time being we are witnessing only partial price decrease only in certain projects. Deals will be made with buyers who have ready cash and who are not looking for properties for investment purposes but for a place to live in permanently. The preferred property type will be one-bedroom apartments in the wide center area at good prices even if they have no extras or are not fully finished, renovated or furnished.
Veselin Petrov, Manager of Plovdiv Office:
The prices of city apartments will have to decrease by 20-25% in order to meet the demand on the part of the buyers. Since November 2008 we are witnessing a price reduction trend which until the beginning of the new year was mainly related to the properties with considerably inflated prices and to properties whose owners wanted to sell fast. This month more and more of the sellers are starting to reduce prices or to rent out their properties. The demand for rural houses and plots of land around Plovdiv remains stable – there is interest both on the part of Bulgarian and of foreign buyers. There will be quite a lot interesting offers for rural properties on the market which will attract the attention of buyers not only from Plovdiv but from around the whole country as well.
Mihail Chobanov, CEO of BULGARIAN PROPERTIES, about Sunny Beach and Bansko:
The interest in holiday homes in the biggest summer and winter resorts decreased considerably as the interest in Bansko almost came to a standstill in 2008. However, this led to attractive prices and advantage on the part of the buyers regarding the choice and price bargaining. Our forecast for 2009 is that the 2008 trend for demand of quality and even luxurious holiday homes in developments with numerous amenities and unique locations like first line and in close proximity to the ski slopes or golf courses will continue.
For questions and comments you can call +359 2 868 1188 or send us an enquiry
Living in Bulgaria - the alternative option for a growing number of foreigners
Copyright: 2009 Bulgarian Properties Ltd. All rights reserved. For further information or advice please contact us on tel: +359 2 9 11 50 or e-mail: email@example.com. The use of this article by third parties is allowed only with proper quotations of the source www.BulgarianProperties.com 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. 2009.
The Bulgarian Sunny Beach resort is a bargain getaway for families as it offers some of the lowest prices for meals out.
According to the Post Office, a three-course meal with a bottle of wine and soft drinks for a family of four costs just 28.51 GBP.
It has some of the cheapest prices among European beach resorts and it's even che... read more
Summer season is at full swing and we have a lot of hot properties on offer along the Black Sea Coast!
It is now the best time to choose your beach property in Bulgaria and we are here to help.
Download our brochure with the top beach properties in 2018 (pdf)
Or view it online here:
Bulgarian beach resorts offer the best prices a... read more
Аt the height of the Summer season of 2019, let's see who our AGENTS OF AUGUST are!
1. Julia Todorova - the big winner from the previous months, is again among the finalists with many successful sales in our hit complex AMUR on Mur Street in Manastirski Livadi and the emblematic Vitosha View complex.
See Julia's offers here
2. Ivan Krumov - for a... read more
For the twenty-second year in a row, the Bansko resort in Pirin Mountain, southwestern Bulgaria, has welcomed foreign and Bulgarian jazz and pop musicians and singers.
The biggest jazz festival in Bulgaria opened with the trademarks of Bulgarian jazz - Vasil Petrov and Kamelia Todorova. British saxophonist Ray Gelato also appeared on stage of the Bansko Jazz Fest with his band The G... read more