Real estate market recovery slowed down
Can you sale an apartment for no more than 2 minutes? Yes, you can, but in Paris. An dwelling of 80 m2 has been sold exactly for a couple of minutes for the price of EUR 620,000. Bulgarian real estate agencies may only dream of such a market, as many offers spend more than a year in the brokers’ computers. The prices in Bulgaria dropped by 30% in 2009 and brokers hoped that the crisis would end in 2010 and the market would wake up. However, that didn’t happen. The real estate prices continued to go down as official statistics marked a 6 percent drop in 2010. Agencies talk about a market recovery, but this is obviously postponed for the next year. What are the reasons? Several additional factors affect the market, besides the crisis and shrunk consumption. One of those is the re-sale of property bought by English or Irish citizens with the purposes of renting or sale for profit. Offering on the market of estates of bank debtors is another factor. Moreover, bad credits reached 16 percent. The market strongly depends on the credits’ interests too, as well as on the migration processes of people from villages to big cities.
Bulgaria is among those 13 EU countries, where the prices of apartments continue to go down, research data of the Knight Frank international company shows. Prices of real estate increase in 33 out of 48 countries worldwide, data reads. Bulgaria is ranked 42nd with its 6 percent drop as the global trend is for a growth of 3 percent. Hotels and restaurants turned out to be most affected by the crisis. A new business hotel in the capital Sofia is sold for USD 12 mln. on the international market. A luxury complex with resting residences and spa is worth USD 2.7 mln., while a shiny villa in a modern sea resort is offered for a bit over a million. One can buy a restaurant of 150 m2 downtown Sofia for USD 315,000.
Unlike other markets, the one for arable land starts to awaken. Not only the funding provided attracts attention, but also the variety of offered lands that are suitable for the growing of some 140 kinds of crops. Data, provided by the Bulgarian Association of Agricultural Land Owners showed that the average price of farmland in 2010 was EUR 1,550 per ha.
What happens to the resorts after the construction boom and the sudden withdrawal of buyers. People from Belgium, the Netherlands, China, Ukraine and France may save the sector. Lithuanians and Estonians can also be included in that group. The neighboring Romanians also turned out to be active buyers through the last couple of years. These form the major buying group at the seaside resorts, along with the traditional Russians and Englishmen. The two-year decline of prices made these resorts so cheap and accessible that the interest shown by more than 20 countries shouldn’t surprise us. Apartments along the Bulgarian Black sea coastline are sold nowadays for EUR 400-1,600 per m2. However, the interest of the British investors faded during the crisis. The trend turned and they are selling now. On the other hand, Russians remain faithful to the Bulgarian real estate market. According to Russian informational sources, Bulgaria is No 1, as far as the preferences of these buyers are concerned.
We’ve come to the luxurious real estate market. The list of 10 most expensive houses in Sofia is topped by one, situated downtown, built up back in 1932 on 800 m2 and offered for sale at a price of EUR 3 mln. A house with a winery, fitness hall and sauna can be bought for EUR 2 mln. Top 10 ends with a luxurious apartment in the prestigious Lozenets neighborhood, offered for EUR 714,000.
Text and photo source: bnr.bg
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