The most important signal with regard to the future of the property market in Bulgaria will be the mid-year decision on whether Bulgaria’s accession to the European Union will go ahead as scheduled in January 2007, according to Strahil Ivanov, head of the Yavlena real estate agency.
Currently, people are waiting for the signal, and in the event of a positive message, the market will develop even more rapidly, Ivanov said.
Asked whether this meant whether this meant that now was a good time to invest, given the good chance that Bulgaria will join the EU in 2007 and a rise in values is inevitable, he said that this was a question of the risks that people were willing to take.
Regarding this year, he foresaw a further upswing in the office, industrial land and agricultural land segments.
Ivanov said that the constitutional ban on foreigners owning land had no dampening effect on the property market, which had been rising at an increasing pace in recent years, because foreigners found ways to purchase property in spite of the ban.
“As a real estate company, we want the ban to be ended as soon as possible, with the only remaining limitations being those in the interests of national security.”
Ivanov said that the increase in the availability of credit with which to buy property had a psychological effect that boosted the market.
“Clients feel more secure about buying property, even if they do not draw on the full amount of credit available.”
Asked in an interview with The Sofia Echo what a real estate company had to do to secure the leading edge in a market that had become very competitive, Ivanov said that a company had to be focused not only on making a profit, but also on achieving a good name for itself.
This meant doing business in a way that was honest and ethical, and there being “full transparency” in a deal, Ivanov said.
A company should be able to offer a full range of services, by being qualified to deal with all sectors of the market, including individual residential ownership and industrial property.
Since 1993, Yavlena has been licensed by the Privatisation Agency to evaluate properties, and currently the company has contracts with 14 banks to evaluate property on their behalf.
“This is one of our strongest sides, to be able to evaluate not only real estate but also companies, in every aspect,” Ivanov said.
He said that his company worked with others in a system of cross-referrals when a client needed a specialist service.
Asked about the risk to the market of being discredited by fly-by-night companies that do not do business in an ethical and honest way, he likened Bulgaria’s real estate market currently to “a river big enough to carry everything with it, not only the clean water”.
He said that, in the long term, those in the market that were not doing business in a professional manner would drop out of it.
Bulgaria’s property market was virtually unregulated, he said, which was “bad and good”. It was good because it enabled the market to develop rapidly, but bad because it meant that there was very little protection for the customer from unscrupulous operators.
In addition, landlords were vulnerable from defaulting tenants because the court system did not function as it should.
“If you own a property and some tenants are occupying your property without the right to do so and without paying, it can take several years to get them out because neither the police nor the prosecutors are able to do so.”
The “rapid” court process to redress the problem was easily slowed down on technical grounds, he said.
Asked about the profile of property purchasers currently, he said that 50 per cent of Yavlena’s clients were people who were, to use the industry term, “exchanging” property, meaning that they had property but wanted something newer or bigger.
More than 60 per cent of property buyers were people aged 25 to 50, a significant change from the 1994 to 1997 period when they tended to be people in their 40s and older who were spending money earned through the restitution process or by other means, Ivanov said.
