THE most recent development of the real estate market in Bulgaria represents a typical example of the relationship between consumption and income but even most prominent economists would have found it difficult to predict the current high prices.
About 2000 properties were sold only in the first 3 days of the Imoti Expo in Sofia last week. One third of the 6000 visitors to the exhibition negotiated with the building companies the purchase of new home or office. Most of the deals were concluded for flats in Sofia and at the seaside.
In Sofia, the price of newly-built apartments starts at 450 euro per square meter and goes up to 1200 euro, construction companies say. To them, the influx of buyers occurred because of the discounts the building entrepreneurs were offering during the expo - from three to seven per cent of the price.
In addition, concluding a deal directly with the builder saves you the commission for the real estate agent, which is two or three per cent of the price. Therefore you may buy a flat for 50 000 euro at 45 000 and safely save 5000 euro, that suffice to buy furniture for the place, new settlers explained.
This did not change the obvious fact that real estate properties worth several million leva were sold at exhibition, which ended on September 26. The event attracted over 100 participants from the construction, consultancy, real estate and financial industries.
The residential, business and commercial properties showcased at the exhibition had a combined value of one billion leva and a built-up area of over 700 000 square meters.
Imoti Expo participants estimated that some 7 500 domestic residential units with a combined area of 675 000 square meters will be completed in the next year and a half.
One of the highlights of the exhibition was the large-scale project of Lindner Bulgaria and Commercia Bulgaria, a unit of the Spanish construction group Detea. The development will occupy 75 hectares on either side of the Sofia ring road, between the Mladost 4 district to the north and the Vitosha mountain foothills on the south, and will incorporate business, residential and retail facilities.
Between 2001 and 2003, Lindner completed the first phase of the site, investing 30 million euro in nine office buildings, under Business Park Sofia. The most eagerly anticipated additions to the park will be a Holiday Inn hotel, a BMW dealership and a multiplex, all expected to open by next year's end. Lindner Bulgaria will also build the 50 million euro residential component of the site. Some 1000 homes will be constructed on a 30 hectare land plot.
Despite the enthusiasm however, some researchers have been observing a process of stagnation in property sales for the last three months. The Real Estate Market Index (REMI) was 139.89 in July 2004 and preserves the same value in September, Orlin Vladikov, chairman of the National Real Estate Association (NREA), said.
For the same period, rents in Bulgaria have increased. The index has risen from 97.5 in July to 112 in September. According to Vladikov, however, this is due to seasonal reasons. Rents for the past one year have declined by eight per cent.
The development of the real estate market in Bulgaria will stabilise and will not reach European price levels soon, NREA forecasts. The projection is based on Bulgaria's actual economic condition and the people's purchasing power and incomes.
Construction companies can still look on the bright side of things because Bulgaria is still thought to be "the new hotspot for prospective holiday home buyers who cannot afford the inflated prices of Spain, France and Italy".
The quotation came from the British newspaper The Observer, which wrote three weeks ago that Bulgaria has been included in the brochures of the main UK tour operators for several years, and its cheap beach and ski holidays have made it the third most popular destination after Spain and France for British holidaymakers.
"Property investors and those looking for a second home for themselves are following hot on their heels, buying a range of property from new beach and ski developments to dilapidated farmhouses," The Observer's Jill Insley wrote.
Prices of properties in Bulgaria are still reasonable for anyone on a limited budget. Here it is possible to find a one-bedroom apartment in Sunny Beach for 30 000 pounds, "while a rural idyll that needs works can go for as little as 10 000 pounds".
To make it easier for the Brits, the overseas lending specialist Conti Financial Services announced that it has recently launched a mortgage for UK citizens looking to buy property in Bulgaria, The Independent newspaper reported. Loans are available from 40 000 euro upwards, with an interest rate of approximately 7.5 per cent. Buyers have to pay back loans in 15 years. According to the company, Bulgaria is increasingly attracting interest both from Bulgarian expats and UK nationals heading to work in the country.
About 2000 properties were sold only in the first 3 days of the Imoti Expo in Sofia last week. One third of the 6000 visitors to the exhibition negotiated with the building companies the purchase of new home or office. Most of the deals were concluded for flats in Sofia and at the seaside.
In Sofia, the price of newly-built apartments starts at 450 euro per square meter and goes up to 1200 euro, construction companies say. To them, the influx of buyers occurred because of the discounts the building entrepreneurs were offering during the expo - from three to seven per cent of the price.
In addition, concluding a deal directly with the builder saves you the commission for the real estate agent, which is two or three per cent of the price. Therefore you may buy a flat for 50 000 euro at 45 000 and safely save 5000 euro, that suffice to buy furniture for the place, new settlers explained.
This did not change the obvious fact that real estate properties worth several million leva were sold at exhibition, which ended on September 26. The event attracted over 100 participants from the construction, consultancy, real estate and financial industries.
The residential, business and commercial properties showcased at the exhibition had a combined value of one billion leva and a built-up area of over 700 000 square meters.
Imoti Expo participants estimated that some 7 500 domestic residential units with a combined area of 675 000 square meters will be completed in the next year and a half.
One of the highlights of the exhibition was the large-scale project of Lindner Bulgaria and Commercia Bulgaria, a unit of the Spanish construction group Detea. The development will occupy 75 hectares on either side of the Sofia ring road, between the Mladost 4 district to the north and the Vitosha mountain foothills on the south, and will incorporate business, residential and retail facilities.
Between 2001 and 2003, Lindner completed the first phase of the site, investing 30 million euro in nine office buildings, under Business Park Sofia. The most eagerly anticipated additions to the park will be a Holiday Inn hotel, a BMW dealership and a multiplex, all expected to open by next year's end. Lindner Bulgaria will also build the 50 million euro residential component of the site. Some 1000 homes will be constructed on a 30 hectare land plot.
Despite the enthusiasm however, some researchers have been observing a process of stagnation in property sales for the last three months. The Real Estate Market Index (REMI) was 139.89 in July 2004 and preserves the same value in September, Orlin Vladikov, chairman of the National Real Estate Association (NREA), said.
For the same period, rents in Bulgaria have increased. The index has risen from 97.5 in July to 112 in September. According to Vladikov, however, this is due to seasonal reasons. Rents for the past one year have declined by eight per cent.
The development of the real estate market in Bulgaria will stabilise and will not reach European price levels soon, NREA forecasts. The projection is based on Bulgaria's actual economic condition and the people's purchasing power and incomes.
Construction companies can still look on the bright side of things because Bulgaria is still thought to be "the new hotspot for prospective holiday home buyers who cannot afford the inflated prices of Spain, France and Italy".
The quotation came from the British newspaper The Observer, which wrote three weeks ago that Bulgaria has been included in the brochures of the main UK tour operators for several years, and its cheap beach and ski holidays have made it the third most popular destination after Spain and France for British holidaymakers.
"Property investors and those looking for a second home for themselves are following hot on their heels, buying a range of property from new beach and ski developments to dilapidated farmhouses," The Observer's Jill Insley wrote.
Prices of properties in Bulgaria are still reasonable for anyone on a limited budget. Here it is possible to find a one-bedroom apartment in Sunny Beach for 30 000 pounds, "while a rural idyll that needs works can go for as little as 10 000 pounds".
To make it easier for the Brits, the overseas lending specialist Conti Financial Services announced that it has recently launched a mortgage for UK citizens looking to buy property in Bulgaria, The Independent newspaper reported. Loans are available from 40 000 euro upwards, with an interest rate of approximately 7.5 per cent. Buyers have to pay back loans in 15 years. According to the company, Bulgaria is increasingly attracting interest both from Bulgarian expats and UK nationals heading to work in the country.
