30.07.2013 Analysis of the Bulgarian property market for 2Q 2013
Polina Stoykova MRICS, Chief Operations Manager and Head of Research
The beach properties continue to dominate and take the largest share of holiday property sales. The volume of the concluded deals in 2013 remains at the levels from the second half of 2012 when the seaside holiday market experienced a real demand recovery and a start of a new cycle in its development.
The sales in the ski resorts and in Bansko in particular remain significantly less than those concluded in the beach resorts. However, we have witnessed a stabilization there as well and an increase in the demand, which has remained even during the summer season this year.
We witnessed an increasing demand and more sales in Sofia over the past 3 months. Buyers interested in quality and more expensive properties became more active and as a result, the number of luxurious property sales increased. The other constantly present large group of buyers was the one searching for apartments in the price range between 30,000 Euro and 50,000 Euro.
The purchases of properties at higher prices influenced the average prices of the concluded deals. In 2Q of 2013 there were almost no deals under the price of 600 Euro/sq.m. As a result, our data shows a positive annual change in the average price of properties in Sofia. According to the BULGARIAN PROPERTIES data, the average price of apartments sold in 2Q of 2013 was 747 EUR/sq.m., compared to 715 EUR/sq.m. in the second quarter of 2012 (4.5% increase year-on-year). Compared to the previous quarter, when the average price of sold apartments was 719 EUR/sq.m., the change is similar (+3.9%).
The positive trends in Sofia are obvious but it is still early to say how stable they will be. We may say that the market in Sofia has reached an equilibrium in which prices are making only small variations and have remained within the same range for the last 2 years (720-750 EUR/sq.m.).
Over the past few years the buyers had two major requirements when choosing a property - the best price and the exact parameters of the property. Compromises were made with the parameters but not with the price. Recently there is an opposite trend - buyers would rather compromise with the price and pay a little more per square meter but buy the property which fully meets their requirements because many of them have already realized how difficult it is to find the property they are looking for.
Sunny Beach and the Black Sea coast
The Southern Black Sea coast continues to be a leader in property sales to Russian buyers. However, Sunny Beach is no longer the only and main attraction. In the past quarter we have seen an increased interest towards Burgas and resorts to the south of Burgas - Lozenets, Sozopol, Chernomorets. Together with this, we have concluded deals with luxurious and expensive properties at prices around and above 1,000 EUR/sq.m. Apart from Russian buyers, who have dominated the holiday property market in the last 4-5 years, demand from Bulgarian buyers also increased in the past quarter and often it is exactly Bulgarians who bought luxury properties in the seaside resorts.
According to the BULGARIAN PROPERTIES data, the average price of apartments sold in Sunny Beach is 550 EUR/sq.m. in the second quarter of 2013, compared to 475 EUR/sq.m. for the same period of 2012 and 512 EUR/sq.m. in the first quarter of 2013.
The average price of apartments sold in Bansko in 2Q of 2013, according to the BULGARIAN PROPERTIES data, is 400 EUR/sq.m., an increase of 4.7% in comparison to the first quarter (382 EUR/sq.m.) and a decrease of 18% (490 EUR/ sq.m.) year-on-year. 100% of the buyers in Bansko this year have been Russians.
Rural house sales have maintained stable levels for a consecutive quarter. The average price of rural houses sold in the second quarter was 19,420 Euro and the largest interest was towards the villages near Burgas, Varna, Stara Zagora, Plovdiv and Veliko Tarnovo.
Average prices of rural houses sold in 2Q as per region:
• Region of Burgas - 29,280 Euro
• Region of Varna and Dobrich - 19,560 Euro
• Region of Plovdiv - 10,930 Euro
• Region of Stara Zagora - 13,240 Euro
• Region of Veliko Tarnovo - 12,250 Euro
• Region of Pleven – 2,500 Euro
2013 has been one of the most dynamic years so far. On one hand are the positive trends on the property market, resulting in a suspension of price falls, a return of the buyers to the market and a property deals growth; on the other hand is the political instability in the country which inevitably affects the economic activity. On the third side is the increasing number of Russian buyers who have found favourable conditions for residence and investment in Bulgaria.
There were a lot of sentiments and emotions in the social and political life of the country over the first 6 months of the year. This has lead to a variable market activity. However, the fluctuations in the market activity have been only short-term. There is no single trend that existed for more than a month and most probably, the second half of 2013 will be similar. The good news is that up until now the positive trends have dominated in the short-term market fluctuations and the property market in Bulgaria is showing an overall stability.
Copyright: 2013 Bulgarian Properties Ltd. All rights reserved. For further information or advice please contact us on tel.: +359 2 9 11 50 or e-mail: firstname.lastname@example.org. 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. and the Author cannot be held responsible for loss or damage as a result of decisions made based on the information presented in this article.
© Bulgarian Properties Ltd. 2013.
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