25.02.2009 Real Estate – Possibilities in a Time of Crisis

Velimira Dimitrova, BULGARIAN PROPERTIES

The first anti-crisis conference in the real estate sector in Bulgaria - BalREAct - Reaction to Crisis was held on 20th February 2009 in the Kempinski Hotel Zografski, Sofia. The main topics which the participants discussed were the state of the legal framework regulating the property sector, investment encouragement and partnerships, the residential policy and the prices and quality on the real estate market.

The conference allowed the professionals in the branch, the financial experts, the representatives of the state and local authorities and the media to discuss the current economic situation in the country as well as the mechanisms for coming out of the crisis.

The participants in BalREAct were unanimous that the sector needs investment incentive policies, as well as improvement of the competitive power and the quality of the product. They also agreed that 2009 is the year of the property buyer.

Some of the main conclusions the participants made during the conference are the following:

• Buyers have become more demanding as now the key details for them are the location, the infrastructure, the amenities, the cleanness and the environment.
• The transparency when taking strategic decisions and the long-term strategy for the development of the real estate market are among the most important conditions for overcoming the current situation.
• At the moment the lending procedure is more complex as the banks require full transparency. The amount of the loan is reduced to about 70% of the property price as was its maximum term.
• The participants on the real estate market in Bulgaria are to sober down and there will be a natural selection which on its part will lead to a normalization of the market.
• The environment in the sector will make development companies invest in increasing the quality and introducing modern systems for the management of the building process and in the certification of the end product.
• Bulgaria is at the beginning of the crisis and if the professionals in the sector manage to analyze the good and bad anti-crisis measures which the other countries have undertaken then the crisis might not take such dimensions as in some other countries.
• After the difficult period is over the developing markets like Bulgaria will be among the most attractive investment destinations and will become a growth driver for a number of western companies as investment in real estate is easy to understand.
• According to experts in the sector now is the right moment to buy a home because buyers have a wide choice and can end up with a good deal.
• The participants in the sector expect that the market will become more active in the second half of the year.

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