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Small urban blocks back into vogue amid crisis

Friday, Dec 19, 2008

As the global financial crisis rips on, small residential buildings are coming back into fashion, construction prices are almost halving, home prices are coming down, and off-plan sales are dying out, investors said.

Investors who have announced big-scale projects will never start to build, and major international companies and investment funds will be hit the hardest, forecast Nikolai Pehlivanov, executive director of Green Life and entrepreneur of the year.

Buildings with floor space of 3,000 and 5,000 sq m will be most in demand next year because of the smaller risk, said Arkadii Chorbadjiiski, owner of property developer Sofbuild.

Prices will fall in all segments of the property market, projected Ivan Mekushin, manager of Winslow Group, which is building a roomy gated complex.

Sliding plot prices will further reduce the cost of new-built properties as the crisis gave speculators the jitters and send them scrambling to sell out, Pehlivanov said.

Flats in the company’s Winslow Gardens project are offered for EUR 1,200 to EUR 1,500 per square metre but sales plummeted in the past three months with only three apartments sold off-plan.

The biggest obstance for entrepreneurs at the moment is banks’ reluctance to lend and the required at least 50% co-funding, Pehlivanov said.

Source: Dnevnik a.m.