[size=85:1hlh1jmp]Sofia echo 08 June 2010

Real estate consultancy says property is best form of investment in Bulgaria

Real estate has soared in value by more than 300 per cent over the past decade, according to real estate consultancy agency Address, and as such, remains the soundest investment in Bulgaria, despite recent falling values, the agency said in a media statement on June 8 2010.

"
Regardless of the decline in value over the past two years, Bulgarian real estate remains the best form of investment,"
the statement reads. The agency goes on to say that "
property currently on offer suffered a further 14.5 per cent decline in value in April and May"
.

Address says that the data disclosed is based on actual transactions completed over the years.

"
Most vendors are poor, people who rely on a minimum monthly income and their house is their only real asset. This is why they are reluctant to part ways with their property at any price. On the contrary, they wait it out – hence most of the best property in the country remain on the market longer as people seek better offers,"
said Tsvetelina Tasseva, chief executive of Address.

According to Address, substantial discounts are still available on the market – a flat of about 90 sq m in the centre of Sofia was recently sold for only 50 000 euro, a 45 per cent markdown on the original asking price.

In another surprising case, Address reports of an apartment in the elite Sofia borough of Lozenets being sold for 58 000 euro, down from the initial asking price of 78 000 euro - a discount of about 35 per cent.

According to Tasseva, towards the fourth quarter of 2009, demand increased by about seven per cent. In the first quarter of 2010 demand increased further still but during the April-May period it slumped by about 15 per cent.

She reckons this tendency is because sellers are less prone to negotiate and complete the deals and are determined to wait it out for better offers in the future.

On average, a 70 sq m flat, fully furnished, in a good area in Sofia, fetches about 40 000 euro, according to Dnevnik. And although such possibilities currently do exist in Sofia, a more realistic possibility for the same price (40 000 euro) would be a 70 sq m flat, which is pending completion and without Article 14, which is a very risky enterprise.

Article 14 relates to a special document that allows for the building to be constructed in the first place. Specifically, it allows for the foundation structure of the building to be erected, including the ceiling, but nothing else. So, technically, buying a flat without article 14 risks a new owner being told that the building has to be razed because it has been erected illegally.

Alternatively, 40 000 euro would buy a 60 sq m in an old "
socialist"
-style panel flat or 45 sq m in a new construction.

Colliers say that property in major cities varies from 400 to 800 euro a sq m, depending on location, and that people are not likely to find property at 200-300 euro a sq m in cities like Sofia and Varna, Dnevnik reported on March 22.

Prospects for the future in 2010 remain uncertain. According to some agencies, the bottom has been reached and values can only increase. According to agencies such as Foros, Colliers, Address and Bulgarian Properties, real estate values will continue to depreciate until the end of June. They reckon on a further 10 per cent decrease followed by stabilisation.

Other property agencies like Aristo, Yavlena and B&
H, however, argue that the bottom of the market was reached in March - April.

Thats a vet real comment and very real property is rising

[size=85:3ar0g0ug]Sofia echo 28 June 2010

Colliers: Real estate in Sofia continues to lose ground


Real estate prices in Sofia continue to decline, albeit at a slower rate than over the past year, Colliers International real estate agency said in a media statement on June 28 2010.

Property levels in certain Sofia boroughs, like Lozenets, Ivan Vazov and Iztok, have reportedly "
stabilised"
, or have dropped in value by three per cent since the turn of the year, or 17 per cent on an annual basis, Colliers said.

Meanwhile, Manastirski Livadi, Vitosha, Buxton, Krustova Vada, and Gotse Delchev account for a five to six per cent decline on average since the turn of the year and up to 19 per cent drop on an annual basis.

New construction in Sofia in the first quarter is reportedly half what it was in 2009. No new large projects have been launched but old projects that were temporarily frozen due to lack of funding, have "
received fresh financing"
and their construction has resumed.

Apartments with up to two rooms, ranging from 40 000 to 90 000 euro, depending on location, are most in demand, with potential buyers searching for "
quality property for under 1000 euro a sq m"
, the report said.

In mid-May, Colliers International said that at the time it was "
the perfect time for investment in real estate"
in Bulgaria, saying it was a case of now or never and that the time was "
exceptionally appropriate for purchasing property"
.

Tatyana Emilova, manager at Colliers International Bulgaria, said the main factors defining the current business environment were the "
affluent choice of supply"
complete with "
alluring price tags"
;
the "
readiness of investors to offer flexible solutions"
and "
suitable credit conditions"
.

Other experts in the field, however, believe that property prices in Bulgaria will fall by at least another 20 per cent in 2010.

Property prices in Bulgaria pushed down by oversupply – study


According to the latest report by property consultants Cushman&
Wakefield, commercial property in Europe has shown growth in demand in the first quarter, particularly among foreign players, thanks to "
improving debt market sentiment, increased interest in larger lot sizes and by a spreading of interest to new areas"
.

However, prices in secondary markets, as is the one in Bulgaria, "
will remain blighted by over-supply and pricing will fall further"
, the report's authors said.

While demand was primarily focused on prime assets in Europe's pivotal markets – with 75 per cent of trading in the top five of the United Kingdom, Germany, Sweden, France and The Netherlands - there was an improvement also observed in Poland, the Czech Republic, Norway and, to some extent, Turkey.

But the positive growth tendencies observed across Europe were by no means following any particular pattern of uniformity and were quite disproportional.

For instance, whereas the British, Turkish and Swedish markets observed a hesitant rental growth, Bulgaria, Ireland, Slovakia, Romania and Greece saw further serious falls.

In the case of southeastern Europe, investors remained on the market and were likely to continue to continue being selective and alert to macroeconomic and local factors despite the economic meltdown in Greece.

"
Despite this, with limited investment supply and finance not yet affordable in all areas, activity is not accelerating as fast as it might. Volumes in the opening quarter were 15 per cent down on the final three months of 2009, although it should be noted that the opening months of the year tend to be quieter, with investors under less pressure to close deals and activity typically 10-15 per cent less than in the usually busy final quarter,"
the report said.