Property market analysis and forecast

Here the investors can examine some basic statistics for the property market in Bulgaria during the last two years and the forecast for the long-term development of the sector.

Property market during 2004

According to the Bulgarian National Association for Real Estate the number of property deals in 2004 was about 200 000 amounting about 3,3 Billion Euro. During 2004 the rise of the property prices was between 20% and 70% depending on the region and the type of the property. The biggest growth was noted in the Sofia residential real estates and the estates in the biggest seaside city Varna and in the popular resorts of the country. Real estate and construction sector formed 10% of the GDP for 2004.

Property market during 2005

The property prices continued their gradual growth during 2005 reaching more than 30% increase at the end of the year. The property market statistics show growth in the sales of real estates. The analysis reveals a rise of the foreign investments. The interest is attracted mostly by commercial properties like offices and stores and residential holiday properties with possibility for renting. The hot property locations remain the same – sea and ski resorts, and the capital city. There are some emerging resorts like Pomorie at the Black Sea and Pamporovo in the Rhodope mountain, attracting tourists and investments. According to the specialists the perspective for the Bulgarian real estate market is good and the growth will continue in the next two years with the same or some lower pace.

Property market forecasts

Based on the fast growth rates of the property prices, the increase in the real estate sector can be predicted in the next years. The prognosis is that the prices will continue to rise until they reach their real market value. The low cost of real estates now is due to the long period of free market absence in Bulgaria and the legal limitation during the communist regime. On the other hand the entry of foreign investment is the reason for the jump in the property prices. Even though the cost paid for the properties is still very low.

The predicted stable growth of the Bulgarian property market can be done based on the following factors: First of all the improved bank services and the mortgage credit politic are leading to lower interest rates, which stimulates the property purchases. Then there is a growth of the foreign investment in Bulgarian properties. The stable political situation in Bulgaria and the EU membership make favourable conditions for sound investments.

The prognosis for the property prices depends on the specific area in Bulgaria. The properties in Sofia and the major Black Sea cities and resorts will get more and more expensive. The demand for properties in the ski resort is also getting higher, as the infrastructure and the ski facilities have been well developed and meet the criteria for a good quality ski vacation. For instance the ski village of Bansko is claimed to be the fastest growing resort in Europe. The prices of the old buildings are expected to remain steady. The number of property deals in the rural countryside may increase, as there are already some villages with properties owned by foreigners. Moreover the rural and the cultural tourism is experiencing a growth during the last years, making location as Veliko Tarnovo, Arbanasi, Ribaritca, Bojenci, Elena, Drianovo and many others.