Real Estate

Banks' Attitude to Determine Bulgaria 2010 Real Estate Market

Properties
The future of the Bulgarian real estate market in 2010 will depend on the attitude and behavior of the banks, leading real estate experts forecast.
The experts, cited by the Bulgarian news agency BTA, spoke during a press conference Monday, saying the financial institutions' actions will determine if there will be stability and growth after the end of the crisis or chaos and low prices.
If in the next few months the banks decide to list on the market the foreclosed properties and sell them fast, the collapse will become inevitable. But if they find a mechanism to hold those properties for a while, the supply can be significantly reduced.
According to one of the largest brokerage agencies in Bulgaria - “Address”, the market now is experiencing a complete shortage of the most desirable properties – 2-bedroom apartments in districts with good infrastructure and such listings sell in less than a week. If the shortage continues, the discrepancy between the “good” and the “bad” properties will deepen, "Address" experts say..
72% of the perspective buyers in the capital Sofia and the Black Sea city of Varna are looking for an apartment listed for up to EUR 40 000 while in the second largest city of Plovdiv and the other Black Sea city of Burgas the desired price is only up to EUR 25 000. In addition, those willing to upgrade to a larger or more luxurious property, are almost non-existent now, compared to a few months ago.
In Bulgaria's largest cities EUR 40 000 can buy a 60 square-meter panel apartment or 45 square-meter one in a newly constructed building. In smaller cities and towns, buyers are not in a hurry to make a deal and wait for another price reduction.
According to “Address” data, the price reduction in 2009 is 28% year on year. In Sofia's “Ovcha Kupel,” “Nadezhda,” and “Lyulin” districts the prices are down 30%. There is also a price slump even for attractive downtown Sofia locations.
Data from the National Statistics Institute (NSI) shows that the average housing price in 2009 for the entire country has been BGN 1002 per square meter. The prices are the highest in Varna - BGN 1686 per square meter, followed by Sofia – BGN 1585, and Burgas – BGN 1360.