News

The increased cost of construction materials and the standstill in property prices will push down the profit margins of the Bulgarian construction companies by 6-8 per cent in 2008, local real estate brokerage Yavlena said.

Currently, the profit margin per build is 30-35 per cent, considerably higher than the 10-20% margin typical for mature markets, the realtors said.

Yavlena is also forecasting zero growth for the price of land plots zoned for residential construction in the bigger cities, citing oversupply. A notable development on the residential segment is the momentum of the secondary market fuelled by non-resident home owners looking to get out of the market, Yavlena manager Strahil Ivanov said.

The foreign property investors are cashing in in increasing numbers to take advantage of the undersupply of finished homes.

Buyers are looking for finished homes in Sofia's southern neighborhoods, but the offerings were very few and far in between. Faced with the lack of supply, buyers were opting for old-construction homes and even prefab apartments where they could move in immediately.

The realtors expect new homes to come on the market soon in the previously unfancied northern districts of the capital at prices lower than prefab apartments.

Property transactions in the first half of 2008 were almost flat year-on-year, real estate agency Foros said. Their number was up just 0.24% to 56,500. Foreign direct investment in the local property market is down to 447.3 mln euro in the first half of 2008 versus 480 mln euro a year ago.

The average housing prices rose 12% over the same period.

July 17 2008, source: dnevnik.bg