Apartments in Panel Buildings May Depreciate by 10-20%

Bulgarian banks have been more cautious in crediting in the past seven-eight months, Plamen Peychev, BestCredit Bulgaria told Profit.bg.Due to the global financial crisis, funding from foreign banks have become more expensive. This made interest rates higher, Peychev added.In the current situation, lenders have stricter criteria and run stricter checks on borrowers.In the field of mortgage crediting, banks are lowering the percentage of the price the credit is covering. It is currently at around 50-70% of the property price, compared with 80%-100% a few years ago.We can expect mass construction, which is also characterized by bad or no infrastructure to depreciate by 10-20%.A few years ago we had reached the absurd situation in which apartments in panel buildings in certain areas had become more expensive than new apartments.Peychev said that he does not expect good quality construction to depreciate. He said the term good quality construction includes luxury buildings and gated residential complexes.We remind that Bulgaria tanked second in the world in terms of real estate price hikes a year ago (+34%).Although official statistics on price changes in the real estate sector in 2008 has not yet been released, experts believe there has been a serious depreciation.