Sofia - prices and sales of new build properties increase

A very strong start of the property market in 2016 – a considerable increase of the number of sales, strengthening of the upward price trend and a great interest towards new residential developments – this is how we can sum up the first quarter of 2016.

“We have witnessed a very big interest towards new developments in Sofia. The buyers are becoming more and more confident when buying properties off-plan. We often witness a very high percentage of apartment sales even before the start of the construction” commented Polina Stoykova MRICS, Managing Director and Head of Research at BULGARIAN PROPERTIES.

“Buyers seem to be a bit behind with the market trends, since a big share of their demand is for properties of up to 50,000 EUR, and the supply of such properties is very scarce, especially in the most desirable districts and in the new development complexes” added Stoykova.

Average prices

Based on data of BULGARIAN PROPERTIES, the average price of apartments sold in Q1 of 2016 in Sofia was 835 EUR/sq.m.

The 800 EUR/sq.m. average price barrier was first crossed in Q4 of 2015. The trend of increasing average property prices continued and even strengthened in Q1 of 2016 and the price levels remained well above 800 EUR/sq.m.

The apartments in Sofia were selling on average for 815 EUR/sq.m. in Q4 of 2015 and for 770 EUR/sq.m. a year before. Respectively, the increase in property prices in Sofia for Q1 of 2016 compared to Q4 in 2015 is 2.5% and on an annual basis it is 8.4%.

Since the beginning of the year, there has been a clear trend for an increased demand for apartments in new developments. For the past months, 50% of the completed transactions in Sofia are in new developments. Most of them are in buildings which are being constructed now, including ones that are in a very early stage of development.

The data of BULGARIAN PROPERTIES also shows that the average price of apartments sold in new developments for Q1 of 2016 was 950 EUR/sq.m. – around 100 EUR/sq.m. higher than the average levels of the market.

The average overall price of apartments sold over the first 3 months of the year was 79,800 EUR, and of apartments in new developments – 90,000 EUR. This illustrates the preferences of the buyers and their willingness to pay higher prices for apartments in new high-quality developments.

Parameters of apartments sold

1 and 2-bedroom apartments have an equal share in the completed sales in Q1 in 2016 and together they represent around 85% of the whole market. The amount of sales of 3-bedroom apartments increases – they represented around 10% of the market. Most of them are in new developments at early stages that allowe the buyers to make different rearrangements and merge smaller apartments into bigger ones with spacious premises according to their particular needs.

The average area of apartments sold in Q1 of 2016 is 90 sq.m. – bigger than in the last quarter of 2015 because of the greater share of apartments with 2 and 3 bedrooms. The most desired floors ware from 2nd to 5th, but there is also a demand for higher floors when the buildings offer beautiful views.

Demand by districts

The demand was very high in the region around Hladilnika and Krastova vada – along Cherni Vrah Boulevard, around mall Paradise Center and towards the ring road. The region is becoming more and more attractive for buyers because of all the amenities at hand nearby, shopping centers, the future completion of metro stations, the inproving infrastructure and the proximity of Vitosha Mountain.

A great example for an exceptional sales success in this region is complex Vitosha View. The sales started at the end of 2015 and for only 2 months the first two buildings of the complex were sold out. Currently, there are active sales going on in the third building and the sales for the fourth one have now started. Out of the 149 apartments in the four buildings, the available for sale currently are only 60.

The districts around South Park are also an attractive zone for buyers. Confirmation for that is the enormous interest that the new development South Park West raised. It is located at one of the entrances of South Park. The sales there literally started just a few days ago.

During the last few years, in the region around the South Park in Sofia some of the most prestigious buildings were constructed, that became emblematic for new development in Sofia. The renovation of the park turned it into a favorite place for parents with children as well as for people of all ages for walks and different outdoor activities.

The districts Studentski grad and Vitosha are also preferred by the buyers. The supply of new developments at reasonable prices in the area (on average around 730 EURO/sq.m.) made them one of the leading districts in terms of sales in Q1 of 2016 as well.

Lozenets and the Center continue leading in terms of property prices – the average property prices there are between 1200 and 1500 EUR/sq.m.

The different parts of Mladost quarter are also among the most desired districts from the buyers.