Land prices fell 30% in some areas of Sofia in 2008 -report
The economic crisis has affected long term investment and construction plans in Sofia and the surrounding area, affecting the market, causing a slump in value of up to 30 per cent in some regions, according to Investor.bg
Given the actual location of the parcel, price deviation varies. The southern boroughs of Sofia, or the 'elite' boroughs, Dragalevtsi, Boyana and Simeonovo, have traditionally maintained higher values through higher demand and thus registered a smaller drop, amounting to 10 per cent. The situation, however, is considerably more precarious in areas like Vrazhdebna and Bojourishte. Locations around the Sofia circular road, around Krivina and the area between Hemus and Trakia motorways, where before the crisis land could be purchased for 120-150 euro for a sq m, now see values of as little as 70 to 80 euro per sq m.
According to surveys from different real estate companies, demand for real estate in and around Sofia is currently next to nothing. Yavlena, a real estate company, reveals that demand during 2008 "dropped several times over" compared to 2007.
The drop in demand has set the benchmark for companies to start identifying the type of construction that is most feasible at the moment. According to real estate company Mirela, most current demand is for single family homes, whereas Yavlena claim that most transactions processed last year involved parcel deals for warehouses, logistical bases and ares for development by factories.
"Whenever economic dynamics are restored, then we can expect the sector to be rejuvenated and demand to increase," said a Yavlena spokesperson.
Storno, another real estate company, reached a similar, logical conclusion: "When mortgage crediting is restored to pre-crisis levels and people are able to afford buying a house, only then can we expect an upsurge in business."
Parcels are a peculiar segment, as they can be used either for development or long term investments. In the first instance, the active party are supposed to be the construction companies, but given the contemporary market conditions, they are in a bad state. The latter case – long term investment – currently, simply doesn't exist.
Mirela and Yavlena both expect that boroughs in Sofia that still maintain high prices will experience a drop in value this year as well.
Given the actual location of the parcel, price deviation varies. The southern boroughs of Sofia, or the 'elite' boroughs, Dragalevtsi, Boyana and Simeonovo, have traditionally maintained higher values through higher demand and thus registered a smaller drop, amounting to 10 per cent. The situation, however, is considerably more precarious in areas like Vrazhdebna and Bojourishte. Locations around the Sofia circular road, around Krivina and the area between Hemus and Trakia motorways, where before the crisis land could be purchased for 120-150 euro for a sq m, now see values of as little as 70 to 80 euro per sq m.
According to surveys from different real estate companies, demand for real estate in and around Sofia is currently next to nothing. Yavlena, a real estate company, reveals that demand during 2008 "dropped several times over" compared to 2007.
The drop in demand has set the benchmark for companies to start identifying the type of construction that is most feasible at the moment. According to real estate company Mirela, most current demand is for single family homes, whereas Yavlena claim that most transactions processed last year involved parcel deals for warehouses, logistical bases and ares for development by factories.
"Whenever economic dynamics are restored, then we can expect the sector to be rejuvenated and demand to increase," said a Yavlena spokesperson.
Storno, another real estate company, reached a similar, logical conclusion: "When mortgage crediting is restored to pre-crisis levels and people are able to afford buying a house, only then can we expect an upsurge in business."
Parcels are a peculiar segment, as they can be used either for development or long term investments. In the first instance, the active party are supposed to be the construction companies, but given the contemporary market conditions, they are in a bad state. The latter case – long term investment – currently, simply doesn't exist.
Mirela and Yavlena both expect that boroughs in Sofia that still maintain high prices will experience a drop in value this year as well.