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Direction of Bulgarian Real Estate Market Unclear

Friday, Jul 09, 2010

A clear estimation of the real estate market in Bulgaria cannot be made due to the buyers's lack of clarity and general indecision.

According to Tsvetelina Taseva, director of the Bulgarian “Address real estate” agency, the drop of prices has not led to more deals, but rather to a “massive outwit”.

“Very often a property is sold at a extremely high or extremely low price,” she said.

According to her, seller do not have financial problems anymore and do not urgently need to sign deals, as it was back in 2008, in her words, when the supply was much more than the demand.

“Clients who desperately wanted to sell their properties have already signed these deals. And the big difference in the supply and demand led to the drop of prices in 2009,” Taseva said.

According to “Address real estate”, there is a balance in the supply and demand now, which leads to a retention in the prices.

“While in 2009 we were witnessing a lot of overvalued properties due to the drop of the prices, today most of the sellers tend to withdraw their bids, rather than sell at low prices,” Taseva said,

According to her, the slight recovery of credits and the big choice make Bulgarian families look for two-bedroom apartments in Sofia at the price of around EUR 55 000, which are also close to a metro station or to their workplace.

About 1/5 of the buyers have decided to buy “the home of their dreams”, which leads to many viewings and a more difficult purchase. The real estate agents believe that job insecurities and repayment of loan are the main factors causing the buyers's insecurities.

The real estate agents have stated that Russians are the main customers at the Bulgarian seaside. Most of them have small budgets and are looking for fast deals about small apartments. Some of them go for the secondary market and supply from English and Irish people who are leaving Bulgaria.

According to the agents, few are the rich Russians who are looking for luxurious properties costing more than EUR 200 000.

“There is a retention of prices in the smaller Bulgarian cities and the market has been stirred, in comparison to the first quarter of 2010,” said Veselin Venev, director of franchising in “Address real estate”.

He explained that the biggest drop by 2% has been in the Bulgarian cities of Kardzhali, Veliko Tarnovo and Yambol. According to him, in 2009 people there have been mostly looking for two-bedroom apartments, and now the three-bedroom apartments have become more available.

“In the small cities, the lack of certainty prevents people from taking loans. However, the sellers here are more eager to make discounts,” Venev said.

He said that despite the low prices, the demand of properties for residential and industrial construction in the small cities remain low, and added that extremely high and low priced deals are common in the small cities as well.

Source: novinite.com