Success Lies in Sense and Pragmatism

How will property prices change? Though banal, the question does not have a simple answer. The factors that influence the market are too many – the more complex lending process, the situation on the labor market and the clients’ attitude are just some of them. The segmenting – not just by property type but also by location will also continue to be a key factor. For example, the investment in real estate in the capital Sofia will be sensible in 2009 as well. “The processes we have been witnessing in the last few months are mainly due to the global financial crisis and to some extent will “open” the market”, says Svetoslav Drumev, Manager of BULGARIAN PROPERTIES’ Sofia office. The sobering down of both sellers and buyers will lead to the realization of only the good projects. This, on its part, will increase the quality of the product offered. “At the moment the investment in a quality home is very reasonable. Prices will become more stable and around the middle of the year they will start to gradually increase. This trend will remain until the end of the year,” Mr. Drumev adds.

In the last couple of years Varna continues to be Sofia’s main rival regarding real estate prices. “In 2009 the prices of Soviet-type blocks and of older properties in the residential quarters on the outskirts of the Sea Capital will fall while the prices in Varna’s top center will remain the same the perspective being for them to increase in the next couple of years,” forecasts Evgeni Zlatev, Manager of BULGARIAN PROPERTIES’ Varna office. The trend which started at the end of last year - the increasing number of leases compared to the smaller number of sales will continue. According to Evgeni Zlatev “the demand for off-plan properties will also decrease due to uncertainty in the financing on the part of the builders and the finishing of the projects and due to the increased supply of quality finished homes.” This will lead to an increased demand for finished apartments.

In contrast to Varna - where foreigners are also one of the groups interested in purchasing properties, the main driver on the Bourgas property market are the financial resources of Bulgarian buyers. “In the last few months the demand decreased which is mainly due to people’s expectations for a great decrease in prices and lucrative deals”, says Nevena Tsvetkova, Manager of BULGARIAN PROPERTIES’ Bourgas office. She adds that at the moment deals are concluded with buyers who have cash and who are not looking for an investment property but for a home. Buyers prefer one-bedroom apartments in the wide center area at a good price even if they do not come with any extras.

It can be said that the crisis shifted the focus of those interested in the property market from holiday homes to residential property. To some extent this is only logical taking into consideration the fact that at times of economic recession one invests only in that which is absolutely necessary and holiday homes do not fall into that category. In 2008 the interest towards the biggest Bulgarian sea and ski resorts decreased significantly, and towards Bansko it almost disappeared. “However, this resulted into very lucrative prices and to an advantage for the buyers due to the greater choice and possibilities to bargain”, says Mihail Chobanov, the Managing Director of BULGARIAN PROPERTIES. According to him the trend from 2008 for a demand of more quality and luxurious holiday properties in developments with unique locations – front line, close to ski runs or golf courses, offering a great number of amenities will deepen in 2009.

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