Sat, Jul 04 2009

PROPERTY FOCUS: Downs and downs

Fri, Jun 06 2008 16:00 CET byElitsa Savova 133 Views

A lot has been said about the real estate market in Bulgaria, on its ups and downs and record-breaking trends. Amid all the contradictory experts' opinions and statements, if there is anything one can trust, it is statistics.

And the statistics show that the number of construction permits issued is decreasing, meaning that investors simply are building less.

According to National Statistical Institute (NSI) data, released at the end of May 2008, the number of construction permits issued in the first three months of 2008 decreased by nearly 20 per cent compared to the last three months of 2007.

Generally speaking, fewer developments does not necessarily mean less built-up area on the market. However, NSI statistics showed that even the built-up area of the projects decreased.

Between January and March 2008, local authorities issued 3505 construction permits, for nearly 2.56 million sq m of built-up area, NSI data showed. Over the same period in 2007, the number of the permits issued was 4049 for a total built-up area of 2.65 million sq m. The difference is even more significant if compared to the figures for the last quarter of 2007, when local authorities issued 4637 permits for 4.46 million sq m.

In Q1 of 2008, the municipality of Bourgas issued most of the permits, 394, followed by the city of Sofia, 311, and Varna, 236. A year earlier, Bourgas was still in the lead with 479 permits issued. Varna then ranked second with 394, followed by the city of Sofia with 263. The trend remained unchanged for a couple of months and in the last three months of 2007, Bourgas issued 618 permits, Varna 354 and Sofia, 312.

Nearly two thirds of all permits issued over these periods were for residential projects. In Q1 of 2008, local authorities issued construction permits for 1.58 million sq m of residential developments. The figures for Q1 2007 showed that the residential developments permits issued then were for 1.77 million sq m, which rose to nearly 2.41 million sq m in Q4 of 2008.

Dnevnik daily quoted Yavlena real estate company representatives as saying that the decrease was not significant, compared to the huge number of developments being built and that would appear on the market. According to Foros real estate company, the decrease was a logical consequence of the property boom in recent years. The decrease was even healthy, they said.

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