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Real Estate Prices In Bulgaria’s Capital
In their new residential market overview, commercial real estate consultants Colliers Partners Bulgaria said on October 17 that there had been an increase in average asking sales price in some Sofia areas of about 20 per cent in the first half of 2007.Average selling prices in emerging neighbourhoods in Sofia were approaching 1000 euro a sq m, according to the company’s latest research.
Meanwhile, established areas in Sofia such as Doctors’ Garden between Shipka and Oborishte streets, Ivan Vazov and Lozenets districts saw solid double digit growth levels in the first half of 2007 with an increase in average asking sales prices of 19, 11 and 19 per cent, respectively. After a decrease in the second half of 2006, Doctors’ Garden compensated in 2007 and is now just below 2000 euro a sq m. Real estate prices in the Iztok area increased by an impressive 51 per cent on average by the end of June 2007.
Rental rates in Sofia, however, increased only marginally compared to sales prices. According to the latest Colliers Partners Bulgaria Residential Market Overview, levels varied substantially even within the same neighbourhood, and depended on location and surroundings, quality, amenities and furnishing.
“The supply of residential properties continues to increase at a steady pace, and the focus remains on planned communities and compound developments,” said Colliers Partners Bulgaria managing director Atanas Garov. According to the company’s general manager Ivan Velkov, demand for premises in residential complexes offering higher level of comfort through added services and amenities was increasing, and would be one of the main driving forces of the market.
The online English-language edition of Dnevnik reported on October 23 that the prices in Sofia for the first nine months of 2007 rose by 34 percent, higher than the country’s average increase of 22 per cent.
Real estate prices in Vidin recorded the biggest increase in Bulgaria, growing by more than 45 per cent for the same period, according to data from the National Statistical Institute in Sofia.
For the period July-September, prices in Sofia jumped by 15 per cent, followed by 12 per cent in Blagoevgrad. The leader was again Vidin with 20 per cent for this three-months period.
Sofia remains the most expensive city in Bulgaria with average price of 2000 leva a sq m, leaving behind the Black Sea city of Varna. In the past two years, prices of apartments in Varna were slightly higher than those in Sofia, but the trend has changed and Sofia is more than 150 leva a sq m ahead of Varna.
Brokers said that the main reason for the price increase was the record of the real price of the deals in the registry offices. Imoti BG real estate agency owner Lybomir Stanimirov said about 80 per cent of the market was based on loans and banks preferred to record the real prices of deals.
B&H Imoti owner Hristo Boikov said that besides this, taxes were now reaching normal limits and there was no sense in hiding real figures. Increases in tax assessments of properties also influenced the trend of announcing the real prices of concluded deals. According to Boikov, inflation, the rise in prices of main foodstuffs and other factors additionally were prompting people to put their money into real estate instead of “eating and drinking it”.
Stanimirov said the main factor for the increase in prices of apartments in Sofia was new construction. In the Sofia districts Malinova Dolina, Manastirski Livadi, Studentski Grad and Vitosha, about 70 per cent of apartments for sale are newly built.
Stanimirov said that at the beginning of 2007, prices in these Sofia neighbourhoods were 800 euro a sq m but had now reached 1200 euro a sq m. According to Boikov, the reason was that when an investor returns the initially invested money or the credits to the financial institutions, this leads to an increase in the prices of unsold apartments in the same building.
Nevertheless, if the prices in Sofia are higher than 1000 leva a sq m, comparatively cheap homes could be bought in small towns around the city, where the price a sq m is about 500 leva.