05.02.2016 The Real Estate Market in Sofia' 2015 - a new beginning
“We have witnessed a very strong interest towards new construction. The buyers are already more confident in buying off-plan. Very often a high percentage of the available apartments are reserved even before the start of the construction itself” added Stoykova.
The data of BULGARIAN PROPERTIES show that during Q4 in 2015 the average price of the apartments in Sofia crossed the 800 Euro/sq.m. barrier for the first time since 2011.
The apartments in Sofia during the last months of the year were selling for 815 Euro/sq.m. on average, compared to 794 Euro/sq.m. for Q3 in 2015 and 766 Euro/sq.m. for Q4 in 2014. Respectively, the increase in property prices for Q4 on an annual basis is 6%, and 3.2% on a quarterly basis.
The data also shows that the average overall price of apartments in Sofia sold in the period October-December was 75,280 Euro.
For 2015 as a whole the average price of apartments in Sofia is 790 Euro/sq.m. compared to 745 Euro/sq.m. in 2014 which is an increase of property prices in the Bulgarian capital with 6%. The average overall purchase price in 2015 is 70,200 Euro.
Our data also shows that the difference between listing prices and deal prices is getting smaller and it is presently under 100 Euro/sq.m. – the smallest difference for years. In 2015 apartments in Sofia were listed for 880 Euro/sq.m. on average – 2% more expensive than in 2014.
The calculations of BULGARIAN PROPERTIES based on data from the Registry Agency show that for Q4 of 2015 there is an 8% increase in the number of completed deals in the capital city on an annual basis. There are 7,541 registered sales for Q4 in 2015 compared to 6,975 for the same period of 2014.
For the whole year 2015 we registered the biggest increase in the number of sales in Sofia for the last few years. The number of registered sales is 24,379 compared to 20,863 in 2014 which is an increase with close to 17%.
Parameters of the homes sold
Over last year there has been a clear increase in the search for bigger apartments. Many of the buyers are looking for 2-bedroom flats but most of the deals closed are with smaller apartments.
50% of all the bought homes in 2015 were 1-bedroom apartments, the 2-bedroom ones were around 35%. A big interest was registered towards studios, which are becoming more attractive as rental income property investments. They represent around 8% of the sales in Sofia during last year.
Demand by districts
The Southern districts of the Bulgarian capital continue to be the most preferred for purchase, and the average price of the homes there is 830 Euro/sq.m.
Other popular zones among the buyers are the Hladilnika and Krastova vada districts – along the Cherni Vrah Boulevard, around the shopping mall Paradise Center and up the boulevard towards Sofia’s ring road. The region is getting more and more popular due to its amenities, trade centers, the future metro stations, the improving infrastructure, and the proximity to Vitosha Mountain where there are skiing facilities.
The districts Studentski grad and Vitosha are also among the preferred by the buyers, and the availability of new construction at affordable prices there (on average 730 Euro/sq.m.) placed them among the districts with highest numbers of purchases made in 2015.
Lozenets and the city center continue being one of the districts that attract a lot of the demand and the property prices there were the highest – on average around 1,100-1,200 Euro/sq.m.
The different parts of Mladost district are among the most desired by buyers as well. The cheapest apartments were in districts like Druzhba, Levski, Suhata reka – on average around 580 Euro/sq.m.
Time on the market
The data of BULGARIAN PROPERTIES shows that during Q4 in 2015 the homes listed for sale managed to get sold on average for 50 days. That was the average time on the market for Q3 as well. That shows that for the whole second part of last year there was a significant decrease of the time it takes to sell a property, which makes the real estate market more liquid as buyers tend to make purchase decisions much faster.
Here’s how the average property stay on the market in Sofia has changed during the last few years as per data from BULGARIAN PROPERTIES:
• 2015 – 63 days – around 2 months
• 2014 – 104 days – around 3,5 months
• 2013 – 97 days – a little over 3 months
• 2012 – 121 days – around 4 months
Based on this data, we can draw a conclusion that the time it takes to sell an apartment in Sofia has shortened by a month and presently a buyer is found on average for 2 months. We have to keep in mind that in order to have a sale in such a time frame, the listing price of the property should be fixed at its fair market value.
Perspectives for 2016
Our expectations are for the upturn in the real estate market in Sofia to continue in 2016 as well with an additional increase in the number of deals made and an increase of property prices with around 7%.
The new development projects will be a hit this year since they meet buyers’ demands better, they are contemporary and better planned, built with higher quality materials and are offered at attractive prices.
Construction companies entered the residential market with new projects in 2015 and this trend can already be felt in terms of greater supply. The new projects are the factor that balances the real estate market in Sofia and helps meet the demand for quality properties at prices that buyers are willing to pay.
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