EU accession drives bulgarian real estate prices up

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Bulgarian real estate prices rose by 10% in the first two months of this year after the country’s accession to the European Union, according to data from the National Statistic Institute.

Demand continues to grow, driven by the increasing number of young people looking to buy housing, while supply is limited.

The trend surprised industry insiders, who expected prices to stabilize after accession.

Should the tendency continue in the next months, the higher prices could be here to stay, said Strahil Ivanov, head of the Yavlena real estate company.

Some prospective buyers believe that supply could dry out entirely within months, driving the prices even higher, he added.

Other brokers, however, argue that the market will settle down. Despite higher prices demanded by sellers, most of the deals were carried out at the real valuation of the properties, said Vasko Atanassov of the “Victoria Invest” real estate agency.

Bank credits remain the main source of financing for real estate deals, as Bulgarian consumers remain hungry for loans and are willing to draw larger sums, a report by lending consultants Credit Centre showed on Monday.

The average size of loans drawn in Bulgaria, according to the report’s data, rose by nearly one fifth to EUR 31,300 at the end of February, compared to EUR 26,000 in December last year.

The report also claims the share of loans over BGN 100,000 (roughly EUR 50,000), rose to 18% in February, compared to 15% in December and 6% at the beginning of 2006.

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