16.06.2011 Housing Price Determinants and the Price Cycle in Bulgaria
The title of the paper is: 'Housing Price Determinants and the Price Cycle: Are the Fundamentals Valid, What is Specific and What Steers the Cycle?' It is the first paper focusing on the real estate market in Bulgaria and comes as a result of months of close observation of the Bulgarian property market, collection and interpretation of market data, all supported by BULGARIAN PROPERTIES and its Market Research Department.
Download a brief presentation of the article from here
Here is an abstract of the paper:
The past decade was very dynamic for the real estate sector throughout the world and especially in Bulgaria, which was often ranked in top 3 of fastest-growing property markets. The housing prices in Bulgaria started the decade at much lower levels compared to all other EU countries in year 2000. Although house prices in Bulgaria still remain on average far below western European levels, they have been catching up rapidly, with real double-digit annual increases, followed by a huge drop of around 40% from 2008 to 2010. This market started developing, went through a boom and then a bust – all this in a period of just 10 years. This was actually the first decade of the existence of a proper real estate market in this post-socialist country, which is presently a member of the EU. Now a lot of questions are raised about how the property market in Bulgaria functions and what are the main determinants of the house prices. Are the fundamental determinants of house prices valid in Bulgaria or there is something specific in this country? What leads the cycle – the GDP and other macroeconomic indicators or the real estate? The current article provides analytical answers to these burning questions using enormous amount of originally collected data and other relevant sources.
The main findings from the conducted research are the following:
• The fundamental long-term housing price determinants are also valid in Bulgaria.
• However, there are some cyclical deviations from the long-term trend which should be explained through the theory of the short-term property price determinants.
• In order to forecast the Bulgarian real estate market the short-term determinants should be used and the general economic development should be considered.
• There are 2 main drivers of the property prices in Bulgaria and their effect appears with a lag of one year.
The participants at the conference expressed a great interest to the topic, to Bulgaria as a developing and attractive property market and to the future development of the real estate markets globally. Many questions were asked and suggestions for future research given, which will be taken in account for our future research projects.
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We are slowly returning to our normal everyday lives and the Bulgarian property market is experiencing a growing demand and a rising volume of deals after the corona virus lockdown.
Here are the present market trends which mark the start of a new beginning for the property market in Bulgaria:
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The average selling price of residential properties in Bulgaria's capital Sofia increased by 4.0% on an annual comparison basis in the first quarter of 2020, local company Bulgarian Properties said.
The average price of dwellings in Sofia reached 1,120 euro ($1,219) per sq m in the first quarter, the realtor said in a quarterly property market analysis published last week.
High activity during the first 3 months of the year and acceleration of the price growth to about 4% on an annual basis. This is how the real estate market in the Bulgarian capital of Sofia developed until mid-March, when the state of emergency was introduced and many economic activities where put on hold.
Average Prices and Annual Change
In the first quarter of 2020...
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To encourage tourists, beaches will also offer free loungers, sun beds and tables when they open again for business.
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