The real estate market in Bulgaria is not expected to see a sudden revival in 2010 as prices are still perceived to be too high, according to the latest industry reports.
Those who are interested in buying are looking for bargains. The most popular property is currently apartments in Bulgaria’s capital Sofia and Varna, the third largest city in the country, that are priced around €40,000, according to a report from the Address real estate agency.
Data from the agency suggests that about 73% of buyers from both Sofia and Varna have said that they were prepared to purchase real estate at that price, if available. ‘Earlier in 2009, people would spend up to €50 000 euro for a home, but now they are hesitating. Most buyers simply don’t have more funds to spend,’ explained Kaloyan Bogdanov, Address’ marketing manager.
Due to the current declining market, buyers are waiting for prices to reach a new low before they make a final decision and the driving factor in real estate transactions in 2010, could end up being so called double estate deals whereby a customer sells a property to finance the purchase of another one., according to Tsvetelina Tasseva, manager of Address.
Banks are also expected to enter the market significantly and offer houses which were foreclosed from customers who failed to cover their mortgages. But this could result in further price falls, Tasseva added.
Varna had the highest real estate prices in the country, according to the latest from the National Statistics Institute, with property selling for 1,686 leva per square meter. Sofia had the second highest prices at 1,585 leva per square meter and then Bourgas at 1,360 leva a square meter.
Its latest reports shows that overall, real estate in Bulgaria lost about 20% of its value in 2009, with prices falling fastest in the fourth quarter of 2009, down 6.4% in some areas.
However, the real worth of property in Bulgaria is somewhat difficult to calculate. While the economic crisis has undoubtedly taken its toll on the industry, the widespread practice of declaring a figure different from the actual appraised value during a transaction means that real estate pricing is hard to regulate.
According to Tatyana Emilova of real estate consultancy firm Colliers, the value of real estate is expected to fall by another 10% on average by July 2010. The ongoing drop in value in the first half of the year was expected to be followed by a stabilization in the market in the second half of the year, she said.
