Cold Feet

Projects across various sectors of Bulgaria's property market are being put on hold, the main reason being the global economic crisis.The effect is not universal and some major transactions have gone ahead, including the 101.5 million euro change of hands of City Center Sofia, while new retail projects in Bulgaria's smaller cities continue to be announced. The global economic crisis is not the sole reason for the property market apparently having passed the highest vertex of its parabola, others being market saturation and frustration at administrative hurdles.A report on December 2 in Bulgarian daily Dnevnik said that tourist projects worth close to 4.5 billion leva were on hold. According to Dnevnik, investor Rila-Samokov 2004 is revising plans for its Super Borovets, which Dnevnik said was now in "standby mode".About two billion leva was supposed to be spent on the construction of about two dozen golf courses over the next five to eight years around Sofia and the northern Black Sea coast. None of the projects has been abandoned yet but investors are hunting for buyers while waiting for better times.On November 27, wire agency SeeNews reported German property investment firm DEGI had postponed the purchase of Mall of Sofia."Due to the current market situation we are postponing the acquisition and we are planning to start again next year, in the first quarter," a company representative told SeeNews on condition of anonymity.According to research published in November by Colliers International, investors had slowed down or halted industrial and logistics centre projects in Bulgaria because administrative hurdles and a worsening global financial market.The projects' fate would be decided in the next three or four months, said Simeon Mitev, manager of real estate agency RE/MAX Chance Group.As to the residential market, it emerged in late November that prices in high-end Sofia neighbourhoods Ivan Vazov and Lozenets had fallen by five per cent over the past six months, according to imoti.net.Knight Frank's Global House Price Index, released in late November, quoted the firm's head of international research, Nicholas Barnes, as saying "Russia and a handful of Eastern Europe countries still performed reasonably well in Q3, with annual price growth even increasing slightly in the Czech Republic. However, there are signs that some of the strongest performers of previous quarters are starting to weaken. Prices in Bulgaria, for example, grew by only three per cent in Q3, half the rate seen in the previous quarter".In October, Foros real estate agency managing director Dobromir Ganev said that Bulgaria's holiday property market was saturated and big projects found no buyers because they were unprofitable.