Banks to Dictate on the Real Estate Market in 2013
Banks will be the main drivers of the property market in 2013, brokers predict forecasting two scenarios.
According to the first one, property prices will jump due to a decrease in interest rates on deposits. In this case it would be possible that more people would prefer to invest their savings in real estate, Orlin Vladikov from the Bulgarian National Real Estate Association informed adding that he expects interest rates on deposits to fall by more than 1% in 2013.
This would trigger an increased demand for EUR 40,000 – EUR 80,000 (EUR 20,400 – EUR 40,800/ USD 27,130 – USD 54,200) low and middle class properties and would thus probably raise their prices, he said.
In the other more pessimistic scenario, banks would enter the property market and would begin to offer mortgaged housing where loans were not repaid. If it comes to this option, there will be a collapse in the real estate prices, Vladikov said.
As for now, banks themselves abstain from this option knowing that they will not be able to recover their funds by flooding the market with cheap apartments.
The agricultural market is expected to remain the most active as here profitability is forecasted to remain around 10% annually.
Source: Standart news
(03.01.2013)