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31.05.2010 Eight reasons why real estate prices are not going to fall (much) |
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 In the \"distant\" 2008 Profit.bg published the material \"Eight reasons for the depreciation of properties in Bulgaria. Two years later and after a significant decrease of 30% now we are trying to give reasons (for the potential buyers seeking them), why real estate prices are not going to fall (or at least not much).
1. Clear signs of a thaw in bank lending.
Exactly the frozen bank lending is the real reason for this free fall of prices (which of course have reached some unreasonably high levels).
Banks have gathered a substantial in size and expensive resource and are trying to make it work hard to justify its price. Of course, we are not going to be witnesses of the \"unconditional\" and somewhat \"insane\" lending, which also helps the inflation of property prices.
Credits will also stabilize the business, including the construction sector, stop the growth of unemployment and increaså consumption.
2. Reduction of interest rates
Reduction of interest rates on mortgage loans is a natural process of bank \"thawing\". It should be mentioned that now interest rates on mortgage loans are at levels of 2006, or before the boom in the sector. Reduction of interest rates may be another incentive for potential buyers to purchase property.
3. Many new projects have been frozen, most of the \"weak hands\" have gone
The increased supply and its significant preponderance over demand during the past two years were also among the factors that exerted pressure on property prices to do down. The crisis, however, is about to turn the trend somewhat.
Many projects that had to enter the market next two years were frozen. As a result supply is reduced as well as the number of the starting new projects and this makes equal supply and demand.
We must take into account also the fact that many speculative players who were selling an year or two ago at any price have left the market.
That is, we can say that the market has cleared to a great extent the \"weak hands\" or those who simply wanted to gain profits from the speculative increase of property prices rapidly and in shortened terms.
4. Cooling in property sector.
The crisis has \"cleared\" also entrepreneurs offering low quality at competitive prices. Most of them left the market after sustained losses.
There are many projects on the market that offer quality at “reasonable price”. Taking into account the strong contraction of the margin of builders as well, then in this direction, there are no many reserves for a significant drop in property prices, which could be a reality only with a serious compromise on quality demanded by buyers.
5. Gradual return of speculative capital.
World economy shows its first signs of recovery. Investors\' attention of course quite logical focus on developing markets.
And even in Europe (where now things seem worse than these of the rest of the world, particularly Asia), we are referred to these markets.
In Bulgaria house prices have reduced by 19 percent on an annual basis, according to GPG statistics. In comparison, the decrease in Ireland is 16% and in Thailand (-20%).
At the same time there are signs that the other markets which year after year were registering drop in prices have reached the bottom, the report said. Among them are Spain (with a 6% decline on an annual basis), Iceland (-14%), Lithuania (-22%) and Latvia (-32% ).
For example, in Latvia house prices have risen by 10.7 percent for the last quarter compared with the previous. It should be taken into account that our economy is significantly more stable than those of the other developing countries on the \"old continent\".
6. Inflation.
The danger of inflation (which is real in case that the recovery of the world and home economics actually occur) may have a beneficial impact on the decision to purchase property among potential buyers.
High inflation leads to reduction of the real incomes of the population. And the purchase of a house, especially for living is one of the best means of protection against inflation. So you insure your future income with which you can buy less and less.
7. The recommendations of specialists.
More and more professionals in the property sphere as well as in the bank sector state that now is the right time to purchase a primary residence. The strong decrease in property prices and the possibility at this stage the buyer to be on the stronger position and to set his conditions to the vendors are among the main reasons for this.
The majority of market participants in the property sector think that currently you can buy quality properties at prices never seen in the recent history.
Of course many of them warn that it is possible the prices to register a further decrease, but it is not clear whether in such cases the choice would be so rich. It should also be taken into account that the best properties offered at extremely favorable terms for example from distressed owners have been sold within a few weeks.
8. Clear signs of stabilizing of property prices.
The process of falling of property prices has been delayed quarter by quarter. The signs of resurgence of the sector become more clearer. Brokers report increased interest and number of viewings.
Of course, we must take notice of that summer is the busiest season for real estate market, so it is entirely possible we to witness not only to halt of the decline of property prices, but even to a slight increase. Source: Profit.bg |
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03.05.2010 Real estates transactions with luxury and cheap properties move the market |
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| The buyers are coming back, interest is arising among them, the number of the real estate transactions is increasing but all of these apply only to properies offered at attractive prices. The real estate market is characterized that way at the moment, according to the Bulgarian real estate company Bulgarian Properties. Deals are made only with luxury or with very cheap properties as the general requirement of the buyers is the price to be proftable. This tendency continues from 2009.
The first three months of 2010 were comparatively successful for the real estates market in Bulgaria as the average activity on the market is with about 40% higher than it was during the first three months of 2009 – the hardest period for the real estates market in the country, is reported by their analyse for the period.
In March the real estate market becomes more active and the number of transactions achieves a record from the beginning of the crisis and increase of 50% applied to the average levels for the last 10 months.
Vacational apartments
The destiny of the vacational apartments that have been already built but not sold so far will be determined in 2010-2011. Probably they will be sold at prices under their value and their owners will sustain heavy losses. This is shown as well by the tendency we notice from the beginning of the year of the considerable decline in prices made by builders and sellers of sea and ski vacational homes.
Rural homes
The rural homes have been maybe hit hard by the crisis with decline of 53% in their prices for a year. The average price of the sold rural homes throuhgout 2009 is 14 300 EUR. Thus, the prices of the rural homes and the homes in small villages have not already stabilized.
At the moment there are no buyers for houses in villages around Sofia but only for land parcels. Expert.bg |
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03.03.2010 Bulgarian property market expects resurgence in 2010 |
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 Real estate agency firm Elta Consult claims that the global economic downturn will have a positive effect on the Bulgarian market in 2010, a company media statement said on March 3 2010.
The firm predicts that prospective buyers of a flat or a second home in Bulgaria will benefit from the crunch, and collapse in prices, and will be able to secure a good deal. Accordingly, this will make the market considerably more flexible that it was in 2009. \"A certain resurgence in the market was observed in the last quarter of 2009 when more deals were processed. The stimulus has come from real estate losing an average of 15 per cent of its value.\"
A similar prognosis emanated from Tihomir Tsakov, manager of Bulgarian real estate agency Aristo, who said that housing property prices in Bulgaria will hit rock bottom by the middle of 2010. They will then stabilise before picking up, rising by at least 10 per cent by the end of the year.
This forecast clashed with projections made by other major real estate agencies such as Colliers, Address and Foros, which expect the fall to continue throughout the first half of the year, tumbling by 10 per cent before settling. Aristo estimated that the Bulgarian housing market has reverted to 2004 levels in terms of deal numbers bearing in mind that only about 200 000 transactions took place in 2009. Regarding new construction projects, Elta Consult say that the market is still severely affected. Construction entrepreneurs are currently limiting themselves to offloading units that have already been finished. Until those houses and flats are sold, it is unlikely that new construction will be contemplated. Additionally, \"they are willing to offer hefty discounts\", the report says.
Analysis from Elta Consult regarding reluctance to begin new construction is also backed by Eurostat data which reveals that permits for real estate construction in Bulgaria fell by 45 per cent in the fourth quarter of 2009, totalling 69.9 per cent fewer apartments compared to the third quarter. Concurrently, permits for construction of administrative buildings were down by 37 per cent. In the last quarter of 2009, a total of 1343 residential buildings were approved for construction, totalling 3900 flats, according to data from the National Statistical Institute.
The port city of Bourgas topped the chart with 155 new buildings approved, followed by Sofia with 150 and Plovdiv with 143. The most apartments, however, would be built in Sofia - 773, followed by 604 in Varna.
03 Mar 2010
Bulgaria property wise |
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Why to invest in Bulgaria? |
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| As with most markets it is the ever increasing demand for Property in Bulgaria that is driving the price increases on property and with no sign of this demand diminishing we can expect this to continue into the future. Indeed its widely published that 25% of British People aim to retire abroad and Bulgaria is one of the most popular destination due to its fantastic all year climate, relatively cheap cost of living and close geographical location to the UK, budget airlines now offer cheap flights from a huge number of UK airports and generally you can travel to Bulgaria in around 2.5 hours. |
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Bulgaria rural properties |
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| Bulgaria offers all the necessary conditions for an untraditional rural vacation - old Bulgarian capitals, monasteries and museum towns, Thracian treasures and icon-painting, dozens of picturesque large and small settlements, fine old homes with rural environment and traditional lifestyle, adjoining yards with domestic animals and gardens, ecologically clean regions and pastoral landscape, well-organized welcome and services for guests with typical Bulgarian hospitality, traditional cuisine, and above all - a unique blend of natural scenery with history, folklore, national arts and crafts, colorful festivals and customs. |
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Rules for incoming non residents |
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 Bulgaria to change rules for incoming non-residents. Incoming non-EU citizens will be required to state the purpose of their visit and to name a local address where they will be staying under the new changes to the Foreigners in Bulgaria Act oked on Wed, July 20, by the standing parliamentary committee on legal affairs. The changes, yet to be approved conclusively by the MPs, supplant the current requirement that foreigners notify to the Bulgarian authorities their address of residence within 5 days of entering the country. |
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Real estates prices are calming down |
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| The real estate market prices are cooling down. This was expected. The reasons are many, but the main one is that already a parity in supply and demand the market. During the last two years we saw a lot of new constructions of good quality coming into market. Real estate market is like all other markets - it is cyclic. The credit exponation of banks and the reviving local business its recent rapid development.
PUBLICATION BY IMOTI BULGARIA MAGAZINE 07/2005 |
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