Bulgaria's real estate market was still far from the peaks reached at the height of the property boom in 2007, but appears to have bottomed out, data released on April 9 by two local realtors showed.
The number of real estate transactions in 2011 was up by 22 per cent compared to the previous year, according to real estate consultancy firm Yavlena, but the bulk of the deals concerned agricultural land.
The number of transactions involving mortgages rose by only 4.2 per cent, and their share in the total number of real estate deals declined to 15 per cent (compared to 25.7 per cent in 2008).
But a positive development was the decrease in the annualised interest rate charged by banks for mortgages, in particular those leva, which now were on the same level as interest rates on mortgages in euro, Yavlena data showed.
Nevertheless, activity on the housing segment was down despite growing supply, as demand for apartments in the medium and high-price range was down drastically. Most prospective customers sought housing in the low price range, defined by Yavlena as 25 000 to 50 000 euro, but supply of such housing was low, Yavlena said.
Prospective buyers were a lot more cautious and less optimistic about the future, but also better informed about financing terms than at the peak of the real estate boom.
Housing prices continued to decline, but at a slower pace than in previous years, Yavlena said. The company said that it envisioned the same trends continuing this year and in 2013.
In a separate statement on the state of the real estate market in the last quarter of 2011 and the first quarter of 2012, consultants Bulgarian Properties struck a more optimistic note, saying that real estate prices had stabilised, as had the number of property transactions.
The strong drop in prices over the previous several years have made certain properties in Bulgaria's winter and seaside resorts attractive, with Russian buyers in particular active in purchasing property on the Black Sea coast.
Russian and Bulgarian buyers were the mainstay of the holiday properties segment of the market (once dominated by British and Irish investors), the company said. The same two groups were most active in purchasing village properties.