Bulgarian real estates

According to data of “Bulgarian Properties” based on the number of concluded deals in the entire country, the rural estates in Bulgaria are 53% cheaper in 2009 compared to the same period in 2008.

For the first time in years, the estate prices have been lowering since the beginning of 2009, says Polina Stoikova – chief executive of the company.

Up until last year, rural estates have been steadily growing in price, marking a 24% growth in 2008 compared to 2007, even though the number of deals has been almost halved.

The analysis of “Bulgarian Properties” for 2009 shows that by the end of March 2009, the decrease of the average prices of rural estates is 40% compared to the average level for 2008. The decrease of sales continued until the end of April, reaching 55% by the end of the same period in 2008.

May 2009 lead to a shift in the estate market due to the cheap prices, which reflected on the rural estate sector as well. Between May and August, the average prices of real estate deals continued to decrease and reached a 33% decrease compared to the first quarter of the year. The number of deals increased by 35%. This data shows the direct connection between the drop of prices and the increasing interest among potential buyers.

For the period January – August 2009, the number of rural estate sales is 37% lower compared to the same period in 2008.

The average prices of sold rural estates decreased from 30 800 EUR to 19 130 EUR by the end of March 2009, followed by another decrease to 17 650 EUR by the end of April and another by the end of August, coming down to 11 950 EUR.

This drop of prices renewed the interest of British buyers of cheap rural estates. The share of these buyers among the foreign clients of “Bulgarian Properties” grew by 10% during the summer, compared to early 2009. Many Bulgarians and other foreigners are also interested in the purchase of rural estates.

The decrease of average prices for sold rural estates is different in the various regions of Bulgaria. The biggest decrease is registered in the villages around Sofia, Varna, Burgas, Plovdiv, Stara Zagora, Yambol and Kardjali – some of the most attractive regions that were growing more and more expensive over the years. Only the rural estates near Vidin and Veliko Tarnovo keep their average prices from 2008.

The statistic according to regions:

Average prices of realized deals with rural estates in Bulgaria in the period 5.2009 – 8.2009:

• Villages near Sofia – 18 000 EUR, average price in 2008 – 29 500 EUR, 39% decrease

• Municipality of Varna – 15 000 EUR with an average price of 31 000 EUR in 2008, 52% decrease

• Municipality of Burgas – 18 500 EUR with an average price of 28 000 EUR in 2008, 34% decrease

• Municipality of Veliko Tarnovo – 14 200 EUR – similar prices as 2008

• Municipality of Yambol – 6 500 EUR with an average price of 16 300 EUR in 2008, 60% decrease

• Municipality of Montana – 3 900 EUR with an average price of 7 850 EUR in 2008, 50% decrease

• Municipality of Vidin – 12 400 EUR – similar prices as 2008

• Municipality of Stara Zagora – 5 400 EUR with an average price of 15 000 EUR in 2008, 64% decrease

• Municipality of Plovdiv – 10 500 EUR with an average price of 17 300 EUR in 2008, 39% decrease

• Municipality of Kardjali – 11 300 EUR with an average price of 24 000 EUR in 2008, 53% decrease

Average prices and price shifts compared to previous years:

• 2005 – 15 450 EUR +37%

• 2006 – 18 510 EUR +20%

• 2007 – 24 800 EUR +34%

• 2008 – 30 800 EUR +24%

• 2009 – 14 380 EUR – 53% until August 2009

Currently, owners are still actively dropping the prices of their real estates. This process is expected to continue over the next few months and is clearly evident in the weekly bulletins if “Bulgarian Properties”. The number of real estates with lowered prices is almost equal to the number of new offers and sometimes even surpasses them. Price drops go as far as 80%.

The latest reports claim that the Bulgarian real estate market is probably at it’s worst, since the drop of prices that began early this year is slowing down during the second quarter.

It’s very probable that the prices of real estates in Bulgaria will stabilize or even grow in the near future, according to the experts from the real estate web portal property-abroad.com. The reason is the once again growing interest in real estates. Soon the country might turn into a favorite for both buyers and investors, because the estates were cheap to begin with and the crisis decreased the prices even further.

Of course, Bulgaria still faces the issues of a saturated market, especially in popular destinations like Bansko. Despite that, it can turn out that the crediting crisis has been beneficial to the estate market in Bulgaria, because it created a new type of investors – informed people that make their own researches and find the destinations that suit them best, instead of following the mass of buyers in the predetermined “popular regions”.

Because of that, the public won’t say that Bulgaria is a bad destination because of the saturation of the market. They will say: Yes, Bansko really seems a bit crowded and this makes prices cheaper, but let’s look around and find the next Bansko ourselves. Maybe the region has never been popular before, but the stable level of demand will sustain good remuneration from rent and will guarantee growth in a longer term.

The Bulgarian economy is enduring a difficult period, and less foreigners are choosing to settle in Sofia. This tendency however is compensated by the increasing number of business representatives in the country. According to Peter Dyakov, chief executive of the estate company “Cleves”, the businessmen rent luxurious apartments.

Many Bulgarians are coming back from abroad and the number of diplomats remains unchanged. Despite the market environment, the demand for apartments is at the same level.

Today the company opened 15 new apartments in the district Boyana as part of their latest project – Cleves Edelweiss. The investment was over three million EUR.

The complex Cleves Edelweiss is located in front of the Boyana Residence. It offers completely furnished one-, two- and three-room apartments for rent. Each apartment comes with a provided underground parking lot with an elevetor access to the home itself. A sauna for the tenants is also part of the offer.

“Cleves” are working on their portfolio of luxurious apartment buildings in the best districts of Sofia, which costed them about 40 million EUR.

To this day, the company has invested in 150 apartments in 9 developing districts of Sofia. 40 of them are already prepared for tenants. The rest are missing minor features and finishing touches. “Cleves” will open the other 110 apartments over the next 18 months.

The company owns and services all apartments in it’s portfolio.

The newly constructed apartment buildings in Bulgaria during the second quarter of 2009 were 679, or 24,1% more than the first quarter of 2009.

This was announced by the press center of the National statistics institute (NSI), citing preliminary research data.

The newly constructed apartment buildings are 51,1% more than all new buildings compared to the previous quarter. Their number is 5 888.

Compared to the same period of last year, the number of constructed buildings is 6,9% higher, and the number of apartments – 30,2% higher.

The municipality of Varna has the biggest number of newly constructed apartment buildings – 157 real estates with 1 204 apartments total. The municipality of Burgas is closely following them with 134 real estates and 1 665 apartments.

Next in the chart is the municipality of Plovdiv – 43 buildings with 414 apartments, the municipality of Sofia – 40 buildings with 78 apartments, the municipality of Stara Zagora – 36 buildings with 139 apartments and the capital city Sofia itself – 35 buildings with 549 apartments.

The total usable area of the newly constructed apartments during the second quarter of 2009 is 411 thousand sq. m., or 15,9% more than the usable area during the same period in 2008. The housing area increases by 12,2%, reaching 258 thousand sq. m.

At the same time, the average usable area of a newly constructed apartment decreases from 75,5 sq. m. during the first quarter of 2009 to 69,9 sq. m. during the second quarter of 2009.

The biggest average usable area of a newly constructed apartment is registered in Vidin – 131, 6 sq. m., and Pazardjik – 128,2 sq. m. The smallest average is registered in Dobrich – 43,6 sq. m. and Smolyan – 55,7 sq. m.

At a certain point in his life, each of us decides to take a major step forward – purchase a real estate. The reasons for this purchase are several – you’re tired of being a tenant and paying someone else’s mortgage; you have enough money and want to make an investment; or just want to take hold of a charming villa to spend your holidays at. Whatever the reasons, the months during the purchase process can prove to be some of the most exciting times in your life. The Bulgarian real estate agency “Address” offers five valuable steps to consider during the purchase of a new property.

1. Calculate your budget!

What kind of credit will I get? Before starting the purchase process you have to calculate carefully the money you have available. If you purchase a real estate with a credit, it would be wise to ask for the assistance of a credit consultant first. He will give you valuable advice on the amount of money you’re likely to receive.

The use of a real estate sales agency is also a good idea, especially because at the current state of the market you needn’t worry about a commission reward for the agency.

2. Find a fitting consultant.

Well-qualified specialists working in your region – and respectively well-acquainted with the market inside the district or village itself – will surely be of good use to you.

3. Inspections.

This is the hardest part for the potential buyer, so make a list of things you consider to be of utmost importance – the amount of noise in the neighborhood, on which floor is the apartment, the condition of the basic accommodations, does the apartment need serious renovation or just a facelift, etc.

Consider how you feel about the real estate itself and think carefully how is it going to fit your current daily routine. Ask questions to the consultant, he knows many specifics about the neighborhood, the quality of construction in the area, etc.

4. Factors for the assessment.

Location and infrastructure – think carefully if the area of the estate you’ve chosen is fitting for you and is the infrastructure satisfactory. Do you have public transport to take you to work, are there convenient institutions nearby – kindergartens, grocery stores, police departments, hospitals, etc.

A typical example – if you like a certain charming house or a garret in a modern suburb, you should most probably take gas expenses for a car into consideration.

Type of construction – brick or concrete is the main question. Everyone knows the advantages of the brick and the drawbacks of concrete, but if brick walls don’t fit your budget, research carefully the construction date of the block of flats. Over the last few years, the Bulgarian market offers new construction techniques – ecological construction and prefabricated houses – they are relatively cheap and have decent thermal insulation.

Distribution of rooms and floor – there are several potential issues with floors. The first and last floor of a building aren’t recommended, but if there’s a significant difference in price, it’s better to take the other factors in consideration first.

5. Conclusion of the deal.

You’ve found your beloved real estate and now want to move in as quick as possible. The conclusion of the purchase process is the finalizing of the deal itself. A notary inspects all documents for errors and verifies the legitimacy of the deal in the end. The new notarial act is added to the national registry.

The average prices of two-room and three-room apartments (of either brick or concrete) in the center of Bulgaria’s Sofia are 19,2% cheaper compared to February of this year, according to the website imoti.net. The drop of prices of two-room apartments is 18,2%, and of three-room apartments – 20,4%. The biggest drop of prices was reported for three-room apartments in the “Zone B-19″ – 27%. The offers in that area are currently between 808 and 958 euro per square meter for an apartment with brick walls that’s only been constructed 2 years ago. The offers for two-room apartments have been constant for the last 6 months. The price of the most expensive one is 128 400 euro, and of the cheapest one – 54 900 euro.

The offers for two-room apartments for the last 6 months in the neighboring “Zone B-18″ are currently 18% lower, while the offers for three-room apartments – 17% lower. Currently, the two-room apartments cost between 946 and 1100 euro per square meter. The cheapest offer is 61 500 euro for a 65 sq. m. apartment with brick walls. The most expensive offer in the area is 74 800 euro for an apartment of 54 sq. m. which is currently under construction. The offers for three-room apartments vary between 784 and 1178 euro per square meter. The cheapest offer is for 88 sq. m. apartment with concrete walls – 69 000 euro. The most expensive new apartment spans over 130 sq. m. and costs 117 000 euro. The most expensive real estate per square meter spans over 90 sq. m. and costs 106 000 euro.

The average offer prices for two-room apartments in the largest prestigious district of Sofia – “Lozenets” – have dropped since February to 374 euro per square meter. According to statistics, that means a drop of 524 euro for the last 12 months. The offers are very varied now, ranging between 950 and 2344 euro per square meter. The cheapest real estate is a new apartment spanning over 70 sq. m. near the last stop of the tram №9, offered for 66 500 euro. Over 3,5 times that price – 236 700 euro – is the cost for an apartment of 101 sq. m. near the South park of Sofia. The prices of three-room apartments have dropped by an average of 309 euro per square meter and currently vary between 964 and 2185 euro. The cheapest offer is for an apartment spanning over 83 sq. m. – 80 000 euro. Nearly 4,6 times this price – 367 000 euro – is the offer for a spacious apartment of 168 sq. m.

The average prices of two-room apartments in another prestigious district of Sofia – “Ivan Vazov” are 23% lower compared to February, which is a decrease of nearly a third. The offers vary between 1100 and 3731 euro per square meter. The cheapest real estate is an old, but renovated apartment with brick walls offered for 77 000 euro. The most expensive offer is 250 000 euro for a 67 sq. m. luxurious real estate built in 1962. The offer is up in the website for more than six months now. The prices of three-room apartments have been constant for the last six months.

The supply in “Lozenets” remains highest

According to the statistics of imoti.net, the biggest number of offers in the wide center of Sofia is in the district “Lozenets”. Currently, 63 two-room and 160 three-room apartments are up for sale in the southern district. Brokers expect the number of offers in the district to remain high for some time. This is due to the numerous new apartment buildings under construction at the moment.

There are 25-two room and a dozen three-room apartments up for sale in another prestigious district – “Ivan Vazov”. The district “Banishora” is the third district with a large number of offers. Currently, 17 two-room apartments and 12 three-room apartments are up for sale. The zones near the metro station have fewer offers. They are the fewest in the “Zone B-18″, with only several real estates for sale.

The fearsome 3 255 000 euro have been paid for a miniature terrain at a top spot in Sofia – in front of the National opera. The 315 sq. m. terrain is about as big as two 4-room apartments. The apartment is shaped like a triangle and is located on the corner of “Dondukov” blvd. and the small “Stara planina” street.

The price of 10 330 euro per square meter breaks the record for the most expensive terrain in Sofia. Up to now, the first place was taken by a terrain on “Todor Alexandrov” blvd. in front of the headquarters of “LUKoil – Bulgaria”, purchased by a Greek company for 8355 euro/sq. m. The third spot was taken by a terrain on “Maria Luiza” blvd., bought by a Greek businessman for 6365 euro/sq. m.

The golden terrain near the Opera was on the real estate market for a price between 4 and 6 million euro in the various real estate agencies. For a 315 sq. m. terrain, the offer was exceedingly steep – between 12 700 and 19 000 euro per square meter. Such deals are a rarity even in famous cities like London and Paris. The business logic dictates that a price can exceed 10 000 euro per sq. m. if the terrain will be later used for a skyscraper, or has a unique location.

Sources of the Bulgarian newspaper “Trud” announced that representatives of the Greek business were interested in the real estate on “Dondukov” blvd. They were ready to provide 3 million euro, but someone gave more. That person was the Bulgarian businessman Svetoslav Atanasov, owner of various hotels, restaurants and bars. The popular night club BIAD is the crown achievement of the businessman.

Atanasov has shares in over 10 companies, and owns the restaurant chain “Pri Yafata”, the restaurant “Vitosha”, the bars “Jim Beam”, “Orient 33″ and “Fire” in Sofia, the “Akord” hotel in the district “Hadji Dimitar”.

The former owner of the terrain is a businessman from Burgas who remained anonymous. The real estate has been purchased with a credit from the Bulgarian-American credit bank. The terrain near the Opera was previously an old house with a coffee shop on the ground floor. Now the building is torn down, and will soon be replaced by a luxurious business building.

Collapse in Sunny beach, 9750 for a studio apartment

The real estates in the Sunny beach resort are given as a prime example of the price collapse in Bulgaria. The local branch of the International federation for real estates alarmed for deals below the cost price. “In just a year, the prices of vacation apartments on the front line of the resort dropped by 15-30%. The apartments further removed from the coast are now 60-70% cheaper”, announced Valeri Vasilev from “Real Estates Bulgaria”.

“There are offers below the cost price, but that doesn’t mean that the investors are losing from the project. They’ve sold some of their apartments at higher costs some time ago”, explained Vasilev. An internet research shows that a studio apartment (25 square meters) at the resort front line of the Sunny beach costs 9750 EUR. An apartment (57 sq. m.) costs 22 750 EUR, or 399 EUR per square meter. The estate is in the western part of the resort.

Another case of a sale below the cost price is a large hotel (18 000 sq. m.) in the Sunny beach. The hotel was sold for 390 EUR/sq. m., or 7 million EUR total. The prices at the Northern Black Sea coast are more stable, but there are still instances of abnormally low prices – 390 EUR/sq. m. for an apartment at “Byalata laguna” (the White lagoon).

“Over the next few months, the prices of real estates in larger cities will stabilize and the drop of prices will come to an end”, prognosticated Valentin Saikov from the International federation for real estates. His motives: there are fewer new constructions, owners withdraw their offers and a balance between supply and demand is coming around. According to Saikov, buyers in Sofia give between 500 and 600 euro for a square meter in a regular apartment and 1200 euro per square meter in a luxurious one.

More than 200 hotels in the region of the Bulgaria southern Black Sea coast are put up for sale. This was announced by the information website “Dnes plus”, citing data from various real estate companies.

The owners of 85 of the hotels demand prices over 1 million euro. Several apartment buildings adapted for tourist needs in the region are also for sale. Their prices are over 3000 euro per square meter. According to brokers, the crisis in the real estate market automatically excludes real estates with prices like these, because of the lack of demand. The record setting price is 3333,33 euro/square meter for a small family hotel in Bulgaria’s Nesebar.

British real estate magazines feature offers for rural houses in Bulgaria, even though just a year ago this branch of the market practically crumbled. The British citizens look for old, crumbling real estates for 4000-5000 EUR in the villages around Elhovo, Pleven and Montana. The prices around Burgas are still higher and this turns investors away, because they’re currently looking for the cheapest on the market. The renovated or new buildings are of no interest to them, explain brokers.

Compared to 5-6 years ago, when the main buyers were the elderly, now there are young customers. English citizens also make a comeback to the cheap vacation real estates priced at levels from 2003-2004. They seek neither luxury nor a good location. They just seek an apartment by the seaside for 20-25 thousand euro. They pay cash and demand that the real estates are completed. Apartments for 300-350 euro per square meter are abundant in the village Tankovo, just a kilometer away from Sunny beach. Sozopol is another popular destination for British tourists. Both investors and construction companies reconsidered their prices and profits and significantly lowered the prices of some estates in the locale Budjaka, which was a victim of intense real estate construction over the last few years.

The investors “Soravia group” announced that fourteen months after the beginning of the project “Megapark” in Sofia, the rough structure is completed. The construction of the complex goes according to plan, and the installation of the sun protection facade is underway. The completion of the first phase of the project is planned for the summer of 2010. The total construction area of the complex is over 111 thousand square meters. The investment is over 100 million euro, provided from personal funds and bank credits. The architectural project was made by the Austrian bureau “Brunner/A&GP International”, and the executive company is another Austrian company – “Strabag”.

“Megapark” is located on the “Tsarigradsko shose” blvd., near the future government center. The business complex will offer 42 thousand square meters of high quality offices and 3500 square meters shopping grounds on the market. MBL, the Bulgarian representative of the international consultation company CB Richard Ellis, is the partner in office and shopping grounds renting. The complex will also have a business hotel and a conference center. The underground parking lot has two levels and a thousand places.

The offices are constructed to provide space for the average and big business on a single floor. The maximum open office area is 4000 square meters per floor. The office grounds feature raised double floors with hidden cabling, four-pipe modular conditioning system, sun protection facade, professional system for building management, fire-extinguishing system, independent energy source, 24 h. security shifts and camera control.

“Megapark” EOOD is part of the Austrian group “Soravia”. So far they have realized three business buildings in Bulgaria. One of them is “International business center”, rented exclusively by “Globul”. The other is “Soravia center”, which houses the headquarters of “Post bank” and “Europark”, the office of the vehicle parts company “Johnson Controls”, offices of UniCredit Leasing, LG and the mineral water “Devin”.