The property price growth in Bulgaria in the past few years has seriously outstripped the growth in the incomes of its citizens.

This was announced on April 13 by the independent analytical company Industry Watch, which was reporting on the macroeconomic prospects of the real estate market in Bulgaria.

In 2002, the average monthly income allowed Bulgarians to buy 0.79sq m of residential property. At the end of 2005, this affordable property dropped to 0.42sq m.

The analysis showed that the average wage purchasing power had dropped twice in the past three years, Luchezar Bogdanov of Industry Watch said.

He added, however, that the statistics do not account for the grey economy and non-declared labour incomes. This means that a lot more indicators will have to be measured to show the actual disposable income of households.

For the period 2002-2004, real estate price growth in Bulgaria outpaced economic growth. While the nominal growth of the gross domestic product (GDP) was 10.5 per cent in 2004 and wages grew by nine per cent on average, property prices made a leap of 47 per cent.

The year 2005 was the first to bring a certain delay in property price growth, and in the last quarter it was 21.6 per cent, as compared to the same period in 2004.

The reported boom in mortgage lending in 2005 contributed to the higher demand for property. The second half of 2005, however, also brought an increase in the number of overdue housing credits. From 0.25 per cent of total in August 2005, they had a share of 0.6 per cent at the beginning of 2006. Their total value has reached almost14 million leva.

Apartments in Sofia now cost Bulgarians more than the housing in Bratislava for Slovakians or in Budapest for Hungarians, Industry Watch also found in its research.

Property in Bratislava and Budapest is 40 to 100 per cent more expensive than Sofia property. At the same time, the incomes in Slovakia and Hungary are 2.5 to three times higher than those in Bulgaria.