Sofia property prices even out

Prices of properties in Sofia have been stabilized, according to data from Bulgarian real estate agency "Bulgarian Properties" and credit holding "Creditex & Hypocredit."
According to the data, the main reason for the stabilization of prices is the reduced construction of new apartments. The National Statistics Institute has announced that construction permits have decreased by 1/3 in the last year.
Another reason is the resumed crediting, which makes sellers more relentless during negotiations.
"Two months before the end of 2010, we can conclude that this year did not show any substantial change in the volume of deals or in prices of properties, in comparison to 2009," the Operation Director of "Bulgarian Properties," Polina Stoykov, said.
According to her, reaching a level of stability was important after periods of high prices, followed by a drastic drop of real estate prices in 2009.
"Bulgarian Properties" has registered that the average price for sol apartments in Sofia in the third quarter of 2010 was EUR 840 per sq.m., which is BGN 30 per sq.m. less in comparison to the second quarter of the year.
Stoykova pointed out that this is a minimal change in the property prices for the past months. Compared to the second quarter, the drop of prices is 3,5%, while compared to the first three months of 2010, the drop is 16%.
The lowest real estate price in Sofia, as registered by the company, was in August – EUR 740 per sq.m. In September, the demand for luxury apartments in the Bulgarian capital increased, which led to the increase of the average price - EUR 997 per sq.m.
At the same time, the number of sold apartments in Sofia in the third quarter of 2010 increased by 10% compared to the previous three months.
"The market was more active this summer, in comparison to previous years," Stoykova said.
According to "Creditex & Hypocredit," prices for small apartments have been stable in the past few months, which in their opinion is the first sign for a forthcoming period of increased prices in this segment of the market.
The conclusion has been based on calculation of the current profitability of residential properties, which is the ratio of the sales price and the potential rent price. It is indicative of the trends in the property market.
The credit company has stated that at present the sales prices are stabilizing faster than rentalprices, which leads to a drop of the current profitability to 4,29% for the first half of 2010,compared to 4,51for 2009.
The drop is felt most significantly in apartments up to 50 sq.m. The company believes that it would soon be felt for bigger apartments as well.
"Apartments in Sofia are already reaching their lowst levels," Krasimir Gumnishki, manager Business Crediting in "Creditex & Hypocredit", said.