Sat, Nov 21 2009

Real estate prices in Bulgaria edge towards recovery

Mon, Jul 13 2009 15:42 CET byNick Iliev 2183 Views 2 Comments
Real estate prices in Bulgaria edge towards recovery

The latest report from Colliers International has indicated that the average price of a home in Bulgaria has decreased by about 14 per cent in the first quarter of 2009 as opposed to corresponding figures from 2008. It also indicated that the country's construction sector has been hit the hardest by the global financial crisis as the drop in investment is expected to reach over one 1.2 billion euro.

Regardless of the slump in value, however, or perhaps because of it, the report anticipated that the Bulgaria property sector will start to regain some ground and restore some of its lost value towards the middle and second half of 2009, homesoverseas.co.uk has reported.

The reduction in value is attributed to two factors: first, the general decline in demand in light of the global economic downturn, and second, the larger supply on offer as a consequence of the ever increasing amount of completed construction on the market. The latter, added to already existing offices that were made vacant by companies departing as a result of poor business performance, has revealed new business opportunities.

The Bulgarian property market, which was considered to be one of the top property investment destinations in the world a couple of years ago, has since suffered, but a crisis inevitably spawns possibilities and opportunities for others. Moreover, there appears to be finally a light at the end of the tunnel, as the rate of decline in prices in Bulgaria will slow down and they will, slowly but surely, gravitate towards equilibrium. Since the beginning of the global economic downturn, the most drastic fall in international demand and a severe oversupply of homes has occurred on the Black Sea coast.

But Colliers Intenational expects that prices in Bulgaria will stabilise in late 2009 or, at the latest, the first quarter of 2010, in large part because construction levels have dropped significantly in Bulgaria, which caused the existing oversupply of residential stock to be absorbed, so easing some of the pressure on the market.


Source: propertywisebulgaria.

Comments

Anonymous Phil Fri, Jul 17 2009 15:17 CET
Inappropriate comment?

Residential stock being absorbed? Maybe by renting but certainly it does not appear to be by sale. I believe that 2009 Q4 2010 Q1 is optimistic to say the least, possibly Sofia end Q2 start Q3 we will see it bottom out and the remaining cities end 2010.
As for Bansko and the Black Sea Torremolinos resorts who knows what may happen? Distressed assets, demolition and start again or renovate simultaneously with infrastructure improvement and efficient sewage treatment? Lets hope that the EU funds will start to be released and put to beneficial use for all Bulgarians and holidaymakers/investors alike!

Anonymous observer Wed, Jul 15 2009 08:30 CET
Inappropriate comment?

one point of view is that the obsorbed numbers will be low because the bad economy keepd people and companies from buying, so oversupply will continue until economical growth returns and people believe in income possibilities

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