[size=85:3k7cyy20]novinite 29 April 2010

Demand for Studio Flats in Bulgaria Expected to Increase

emand for smaller real estate in Bulgaria could increase this year as the number of small properties being built has fallen so much that there is not enough supply, it is claimed. Small studio flats priced at around €25,000 have been accounting for 34% of total sales in the country’s real estate market but few new projects are due for completion, according to property consultancy Address.

‘The supply of such types of studios is decreasing while new construction for the moment is rather dormant. This is likely to create a demand that is likely to surpass initial forecasts,’ said marketing manager Kaloyan Bogdanov.

Buyers are bargaining hard and in 87% of cases they are asking for discounts on asking prices. In the first three months of the year the average discount amounted to €3,000.

The agency sellers are being urged by banks to keep the prices high but have to make discounts if they want to sell or risk losing buyers. On average, the discounts amounted to about 5% of the asking price.

The real estate market shows no sign of recovery yet, the agency continued. It reckons that a mild rise in values in local real estate is not to be expected until the third, or perhaps even the fourth quarter of 2010 because of the economic situation.

Other agencies think that the bottom has been reached. Aristo is even forecasting a 10% increase in prices by the end of 2010. But according to agencies such as Foros, Colliers, Address and Bulgarian Properties, real estate values will continue to depreciate until the beginning of June. They reckon on a further 10% decrease followed by a stabilisation in prices.

And according to Industry Watch, real estate values are likely to drop by another 10% due to the weak influx of foreign capital and delayed bank credit in Bulgaria and the fact there is no sign of foreign investors returning to the market.

Bulgaria was once a favourite of overseas buyers especially from the UK, Ireland and Scandinavia. From 2006 to 2008 foreign investment in Bulgarian real estate accounted for more than €2 billion while in the preceding three years it was about €300 million a year.

But since the global economic downturn the flow has stopped. Real estate in Bulgaria's largest cities and towns recorded an average decrease of about 28% in the third quarter of 2009, compared to the previous year, according to figures from the National Statistics Institute (NSI).

In light of the economic crisis in Bulgaria and rising unemployment, the number of potential buyers in the country is only likely to decrease throughout 2010.

I think bulgaria is in a bit of trouble (amongst others) and i do not see it getting better either. for visiting foreigners prices are now extortionate in the holiday areas and with little to offer in comparison with other countries who do proviide facilities for children, bulgaria is lacking in this area badly, fine dining :Ch:no, entertainment, what entertainment. lacking.

for foreigners living here, yes housing is cheap, but the cost of living has gone crazy, my car tax is 650 levs and if i want fully comprehensive it will cost 1,800 levs. (way above uk prices), its nothing special only 2 ltr rav.

if bulgaria continues this trend it is doomed.
as for bulgarians, low pay, it will make life hard for them.

im not moaning, just an observation, studios are more affordable but only have one room, not ideal for everyone.

Got to agree with all you say starlite but unfortunately I don't see things get any better in the short term for anyone ok so some flats are in demand and maybe because they are cheap? but I don't believe this trend as far as flats are concerned will last and more importantly make the slightest deference to the market trend

in three years in our village, we counted 50 houses for sale, one sold and another one went on the market, no change, nothing happening here, the exchange rate has taken its effect rather badly here, some are asking far too much for houses in real need of renovation and the new ones still unsold. it thankfully makes no difference to me, but shows that the estate market has suffered greatly and the future, well, who knows.

Hi,

Property market moved Bulgaria up 2-3 years ago. Now it is in a deep crisis. I will not be suprised in Bulgaria follows soon Greece and bankrupt. When you yearn money fast, you lose then rapidly. So, the business in Bulgaria was such.