News

The average sale price for a sq m of residential property in Bulgaria reached 1090 leva in 2007, a 30 per cent increase over the 840 leva from a year previously. The overall price hike of residential properties for the last three years is 300 per cent, Kapital weekly reported.

Despite the price increase, the number of property deals went up with 10 per cent. Real estate agencies told Kapital Weekly the period between an apartment offer publication and signing a deal has dropped to less than a month.

“All of us expected a price hike in the range from 10 to 15 per cent, but we were wrong,” Mladen Mitov from Yavlena real estate agency told Kapital Weekly.

Despite the strong dynamics of the business properties market, the residential market remains the most active sector in the country.

Experts said a 30 per cent price hike made sense given that inflation for the year reached 12.6 per cent. Most of the countries that has joined the European union registered a significant increase of real estate prices in their first year as a EU members.

The interest towards pre-fab apartments remains very high. Panel apartments satisfy the demand of the large number of clients with low requirements towards the property. As a result, prices of panel apartments went beyond 1000 euro a sq m.

The panel apartment advantage is the net area you pay for and receive – if you pay for 30 sq m you get exactly 30 sq m living area. If you buy a newly built monolithic apartment at least 10 per cent of the announced area is common parts. The neighbourhoods made of panel apartment buildings also have the advantage of a developed transport infrastructure, kindergartens and schools.

Real estate agencies expect the upward trend of house prices in Bulgaria to continue in 2008, albeit at a slower pace, Kapital Weekly reports, and the largest residential properties market, Sofia, will not reach the point of saturation soon.

“I believe the price growth will slow down, but there is no chance for prices dropping, because the market is still in a desperate need of homes,” according to Blagovest Baldev from Adaptconsult agency, as quoted by Kapital. Baldev expected prices to rise by 10-15 per cent this year. The biggest price hikes are expected for residential units in suburban areas, especially those of a higher quality, while panel apartments prices will slow.

“The high demand is a thing of the past and now we will see high supply. We expect 20 per cent increase of the residential stock in Sofia and 15 per cent in the country,” Mladen Mitov from Yavlena agency said.

At the same time, customer requirements for residential properties haven't changed much, as most of the customers buy with investment purpose, where top location is still a leading factor. Small apartments are preferred despite the price hike.

But in the coming years, the increased supply of large scale projects will dictate the market trends. Investors interest has already turned towards peripheral areas developments, satellite villages and gated complexes. Soon the quality of construction will become a major factor for clients, Kapital weekly concludes.

February 12 2008, source: www.sofiaecho.com