[size=55:3fbi0rns]Dnevnik 25 April 2010

Bulgarias home prices move south for sixth quarter in a row

For a sixth consecutive quarter, home prices in Bulgaria staged a decline, shedding an average of 2.3% to BGN 978/sq m between January and March 2010, show the latest numbers of the National Statistical Institute (NSI).

Real estate agency also recorded a drop but estimates differed from the official figures, with Address and Bulgarian Properties saying housing prices fell by 5% for the same period.

On an annual basis, the reduction was pegged at 17.8% by the NSI.

Nineteen regional cities saw lower prices, sharpest in Razgrad (9.5%), Yambol (8.4%) and Bourgas (8.4%).

In Sofia, home prices slid by 1.7% to BGN 1558/sq m, according to NSI. Raiffeisen Real Estate pinned down the fall at 6.5% on the month and 18.8% on the year.

At the beginning of the year, home demand centered on new and finished properties so prices in this segment remained relatively stable, said Ivan Velkov, manager of Raiffeisen Real Estate.

He commented that the better lending conditions are starting to prop up the market. Bank financing is helping the market but also tempting sellers to put up prices, according to Kaloyan Bogdanov, marketing manager of Address.

He noted that small flats, mostly newly-built, boasting good quality and location, worth up to EUR 25,000, are generating strongest interest, accounting for 34% of the agencys total transactions.

The supply of this type of property is dwindling and few are under construction. Demand for small apartments could outstrip demand in the coming months, he predicted.

Buyers are ready to make discounts, of up to EUR 3,000 on average, Address said.

The northern coastal city of Varna offers the costliest homes, of BGN 1,633/sq m, according to the NSI.

A trend towards fragile uptick in home prices could not emerge before the third and even fourth quarter of 2010.

This will only happen if and when the Bulgarian economy improves and there is widespread perception that income has stabilised,said Tsvetelina Taseva, executive director of Address.