First topic message reminder :

[size=55:w9sgjmz2][You must be registered and logged in to see this link.]

Bulgarian Property Market Heading For Bottomsville

During the (now not so recent) overseas property boom Bulgaria had its fair share of popularity. Indeed, in the run up to its EU accession in 2002 it was among the top destinations for overseas property investors to buy. However, as with so many of the early successes, it was a victim of that success and it became overdeveloped.

I remember researching the market in 2008 to value a 2 bedroom apartment in a newly completed Bansko ski resort so that its owner could set a suitable asking price. I found that the market was absolutely saturated with similar properties in the same area, and this was dragging down prices rapidly.

Of course, then it got caught up in the global financial crisis, and this only made matters worse. The fact that Bulgarian property prices were already in freefall when the crisis all but killed foreign demand led to Bulgarian prices falling among the farthest of any nation in the world.

But as we all know, falling prices are only bad for sellers, for buyers they present an opportunity, and if you can get in just as a market bottoms or slightly before, you can be in for some good gains, especially if a market has a v-shaped recovery.

No one is suggesting that Bulgaria is in for such a sharp recovery, but it is starting to look like a bottom has been found. Many Eastern European markets like Romania and Latvia never really suffered a recession, but their housing markets crashed. In Latvia prices fell by about 50%, but because the economy remained strong, once prices bottomed it enjoyed a rapid recovery, and the same was predicted for Romania. But of course, Bulgaria did suffer a recession, and this combined with the over-supply will almost certainly prevent a fast recovery in house prices.

However, one other thing that those markets have in common is that prices fell by about 40-50 per cent before the market bottomed. Now that prices in Bulgaria have fallen by 38% (as of May this year) according to the National Statistics Office, and the economy is on the turn, experts are starting to predict that a bottom for Bulgaria could be just around the corner.

According to the Bulgarian National Statistics Office annual house price index, house prices were down 21.4% in 2009 compared to 2008. In 2010 this decline slowed to 10.1%, and last year the decline was just 6.1%. Quarterly data from the same source shows the first slight quarterly growth in Q2 2012 of 0.2%, following a decline of 0.4% in Q1 and 1.5% in Q4 2011. In Q3 2012 prices declined 0.5%. This is hard from staggering, but it does support the theory that the market is stabilising.

Of course, this is nationalised data, and there are vast regional differences. In places like Bansko, where oversupply is great it will likely take a great increase in foreign demand, which will take a great increase in sentiment, which will probably take a turnaround in the EU debt crisis, or something of that magnitude -- I won't be holding my breath.

Can we get this back on topic.

I am sure you can split the off-topic posts to a new topic, but as agreed here - price bottom of property are influenced by economic state of Bulgaria so this is what we discuss...

prawler wrote:

I am sure you can split the off-topic posts to a new topic, but as agreed here - price bottom of property are influenced by economic state of Bulgaria so this is what we discuss...

I could split this topic but I have no intention of doing so! Please continue to discuss the issue but lets not get too serous about it, remember this is a friendly forum so lets keep it that way.

...

prawler wrote:

I don't see any offences in the topic to make it unfriendly...

I haven't said there is?

Ah you are so young and a Bulgarian Prawler so I understand your side of things to which I largely agree as I previously said. You may also be an agent but please realise that we can discuss things without going off topic about EU handouts. We are talking about the downturn in property prices in Bulgaria which is actually happening the world over. There are forces at work beyond what any of us could have predicted and some people must be in a terrible state who now need to sell.
I remain convinced that Bulgaria is a good bet even nowadays but foreigners and British in particular, have to realise that unrenovated property and life here in general is very very different to UK. If you have the cash and don't need an immediate return, Bulgaria is the place for you. If you want an affordable life in Bulgaria then this is also the place for you but please don't expect too much and please try to understand the Bulgarian culture. Lastly take all agent's predictions and statistics with a large pinch of sale.

That last sentence of yours says it all..take little notice of anything an agent has to say in regards to market trends. I've never used an agent in all of my dealings in this country and haven't come unstuck yet..common sense will always prevail and it comes free of charge.

bgbazz wrote:

That last sentence of yours says it all..take little notice of anything an agent has to say in regards to market trends. I've never used an agent in all of my dealings in this country and haven't come unstuck yet..common sense will always prevail and it comes free of charge.

Gents, you are quite offensive now. Though being an agent, I am an ordinary man, I stand on my words and I am in now way hoping of selling something to any of you - first of all we only do Black Sea, secondly I have enough of Russians on my head...
I was just exchanging thoughts with you and to a stage you agreed with me, now you are starting diversification agents/non-agents/expats

prawler wrote:

Gents, you are quite offensive now. Though being an agent, I am an ordinary man, I stand on my words and I am in now way hoping of selling something to any of you - first of all we only do Black Sea, secondly I have enough of Russians on my head...
I was just exchanging thoughts with you and to a stage you agreed with me, now you are starting diversification agents/non-agents/expats

There is nothing offensive here only members stating their opinion and experience which is what this forum is about. As I said before this forum will not allow any personal attacks on anyone. Please be assured that this forum is moderated very well and I can not see anywhere there has been an attack on you.

Quote :

first of all we only do Black Sea, secondly I have enough of Russians on my head...

I am interested in how the housing market 'pans' out on the Black Sea Coast. I would say it is not looking good, short term or long term. This comes from personal experience of buying an apartment on the coast which is now worth half of what I payed for it.

Some places have been over developed and sellers cannot give them away.

With regards to Russian buyers. They certainly have the money and tend to buy upmarket. English sellers are still losing out as they are not getting a return on their investment. Selling for half of what you paid is not a good idea.

I still think in 3 / 5 years those who bought in a decent village will do well. Let me give you an example. I paid 8K for a small house in 2007 and spent a couple more renovating it. The value now would be around 20K. Give it 5 years and if the market does well, which I predit, I think 30K up would be realistic.

I bet I would still struggle to get back what I paid for my apartment on the coast.

As said from an investment point of view you will need to look at other countries but from the point of view of life style Bulgaria is the place for me, but its not for the faint hearted.

Hi,
I am a total newbie and know little about Bulgaria but would love to add my unsolicited view.

House prices seem lower in Bulgaria than anywhere else in Europe and at the moment seem to be still tumbling. The reasons are more than likely a combination of factors rather than just one.
1. The exodus from the country over recent years leaving many properties empty, thus reducing demand. As opposed to the UK where there is a continually rising population and a shortage of houses which keeps the property prices mainly on an upward groove.
2. The reputation of the country. I have even been told by Romanians not to set foot in Bulgaria as they are all thieves and bandits. It is a proven fact that when anything bad happens the news spreads 9 times faster than good news. One person has a bad experience buying a property and he/she lets all and sundry know about it, on the other hand, if the sale goes through reasonably simply and you are happy with your lot you are unlikely to be standing on a soap box in Hyde Park telling anybody that will listen.
3. The financial crisis the World over. This might be a time when a few people start looking for somewhere cheaper to live but in the main the financial crisis has just made people tighten their belts and worry what is going to happen to them should their job disappear. People I know spend more time talking about how quiet their business is at the moment rather than where they are going on holiday or what little luxury they are going to buy on pay day.
4. One reason I would see as why this isn't the bottom is that with the doors opening to the UK more people might leave, thus leaving yet more properties empty. In the past I would have said that the money sent home by people working in the UK and elsewhere in Europe would help to inflate the country's coffers but this time I have a feeling the restrictions they are trying to impose on handouts and the lack of any employment is unlikely to have that effect.

Sorry if I have over-written, I am just as bad when I start talking

I would add that if you are living somewhere and don't intend moving to another country in the near future, why worry. It is really only relevant if you want to borrow money on your property or downsize/upsize.

Feel free to tell me I don't know what I am talking about

Oddjob57 wrote:

I have even been told by Romanians not to set foot in Bulgaria as they are all thieves and bandits.

Strange, the Bulgarians say exactly the same thing about the Romanians and Turks! [You must be registered and logged in to see this image.]

None of your 4 points is correct - prices simply were overpriced due to the big demand from UK/Irish buyers to whom even the inflated prices seemed really attractive.
Now that these prices are 50% down, the so-called investors are left penniless and with no cash to invest, haha :)