Wed, Mar 03 2010
Real estate agency firm Elta Consult claims that the global economic downturn will have a positive effect on the Bulgarian market in 2010, a company media statement said on March 3 2010.
The firm predicts that prospective buyers of a flat or a second home in Bulgaria will benefit from the crunch, and collapse in prices, and will be able to secure a good deal. Accordingly, this will make the market considerably more flexible that it was in 2009.
"A certain resurgence in the market was observed in the last quarter of 2009 when more deals were processed. The stimulus has come from real estate losing an average of 15 per cent of its value."
A similar prognosis emanated from Tihomir Tsakov, manager of Bulgarian real estate agency Aristo, who said that housing property prices in Bulgaria will hit rock bottom by the middle of 2010. They will then stabilise before picking up, rising by at least 10 per cent by the end of the year.
This forecast is reinforced by other projections made by other major real estate agencies such as Colliers, Address and Foros, which expect the fall to continue throughout the first half of the year, tumbling by 10 per cent before settling.
Aristo estimated that the Bulgarian housing market has reverted to 2004 levels in terms of deal numbers bearing in mind that only about 200 000 transactions took place in 2009.
Regarding new construction projects, Elta Consult say that the market is still severely affected. Construction entrepreneurs are currently limiting themselves to offloading units that have already been finished. Until those houses and flats are sold, it is unlikely that new construction will be contemplated.
Additionally, "they are willing to offer hefty discounts", the report says.
Analysis from Elta Consult regarding reluctance to begin new construction is also backed by Eurostat data which reveals that permits for real estate construction in Bulgaria fell by 45 per cent in the fourth quarter of 2009, totalling 69.9 per cent fewer apartments compared to the third quarter.
Concurrently, permits for construction of administrative buildings were down by 37 per cent.
In the last quarter of 2009, a total of 1343 residential buildings were approved for construction, totalling 3900 flats, according to data from the National Statistical Institute. The port city of Bourgas topped the chart with 155 new buildings approved, followed by Sofia with 150 and Plovdiv with 143.
The most apartments, however, would be built in Sofia - 773, followed by 604 in Varna.