[size=75:384h7tp5]novinite 12 January 2010

Bulgaria Real Estate Negative Trends Continue in 2010 Report

he negative trends in Bulgaria's real estate market will continue at least until the third quarter of 2010, a property report of the Foros agency reveals Tuesday.

Due to the unstable economic situation in the country there are no expectation for changes in the investment climate while price decrease, low demand, low sales, lack of foreign buyers and limited bank crediting are to continue at least until mid-2010.

The only difference, according to the report, is that in the first three quarters, the supply of residential units will continue to go down, leading to a short-term balance between supply and demand. In 2009, in Bulgaria's largest cities, home sales went down an average of 39%, but currently the supply is still larger than the demand.

In the third quarter there are expectations for new residential projects to appear and revive the real estate market.

The number of finalized sales in the first half of 2010 will go down 10% - 13% compared to the same period last year when 87 459 sales were concluded in Bulgaria a staggering 35% less that January June of 2008.

Sales prices and rent prices will also continue the trend of going down and in the first six months of the year they will be 10% lower in some areas of the country. In comparison, during the same period of 2009, sales prices were down 16% and rent went down 19% with the majority of the sales concluded with prices about 20% lower than the listing ones.

In 2009, Bulgarians have formed the majority of those who have purchased homes in the country 92%, followed by Russians and citizens of the former Soviet Republics.

By the end of the third quarter of 2009 the revenues from foreign real estate investors have been EUR 433 M compared to EUR 1 081 M in 2008, or a decrease of 60%.

The one-bedroom apartments have remained top sellers in 2009. Only 5% to 10% of the home purchases have been financed through mortgages due to banks limiting the granting of loans while in 2008, 65% of the purchases have been financed by bank loans.