The property market in Sofia stayed stable in 2007 H2 and prices in most city areas rose significantly, a research by Colliers International reveals.

Prices rose the most in the areas of Ivan Vazov (by an average of 33%) and Lozenetz (29%). Homes continue to be most expensive in the Doctor's Garden area where the average price topped 2,000 eur/square meter.

In the developing neighborhood of Manastirski Livadi homes appreciated 25% last year to 1,000 eur/square meter. Among the newly emerged neighborhoods in the capital city, the most expensive is still Gotse Delchev, where the average price per square meter is around 1,144 euros. As a whole, the prices of homes currently under construction are 20% below those of existing homes, Colliers points out.

Rents have also increased significantly in H2, although at a bit slower pace than property prices. This means return on investment in properties with the aim of renting depends more on the price changes than on the rent levels.

A tendency observed in 2007 H2 is the decreasing offering of holiday properties. According to the latest research findings from Colliers International the increase in supply was 16% in H2 2007. This should be seen, however, in the context of an annual increase in supply (H2 2006 to H2 2007) of 170% in the mountain resorts and 65% in the coastal resorts respectively.

The global credit crisis resulted in the withdrawal of a core target market for holiday homes – the British and the Irish, compensated however by a new wave of Russian speaking individuals, Romanian and Scandinavian buyers. Demand is shifting towards high-end, finished properties with more rooms and a higher level of service.

The span of sales prices narrowed in the second half of 2007, with an average asking sales price of EUR 1,210 – 1,420/m2 in the mountain resorts. The lowest average prices were seen in Pamporovo, with the highest in Razlog. The lowest average sales prices in the coastal resorts are in Kavarna (EUR 1,020/m2) with the highest in Sozopol (EUR 1,425/m2). Colliers research further shows that the Elenite had the highest absorption rates in H2 2007 with 84%, while Ravda has seen the largest decrease in absorption – from 65% in H1 2007 to 41%.