The real estate market in Bulgaria is yet to develop. There might be certain fluctuations on some segments or in some areas (like vacation villages), but these cases will be local and isolated. The market will witness years of growth, according to Rosen Plevneliev, Lindner regional manager for Bulgaria, who spoke at the annual meeting between business and government held yesterday.
In his words the markets of residential properties, commercial premises and industrial real estate are still on an early stage of development.
Construction permits issued in first and second quarter were 75% more than in the respective periods in 2005. Two years ago the number of permissions issued stood at 2 mln, while in 2007 it has risen to 3.5 mln. Nearly 240,000 deals involving real estate were completed in 2005, of which 64,000 were financed by mortgage credits. The number of completed buildings in the same year stood at 1,854, and the number of newly-built apartments was 12,110.
In 2006 the number of deals on the market of properties stood at 261,000, of which 71,500 financed by mortgage credits. The construction of 2,072 buildings has been completed, new apartments were 13,266.
In the capital Sofia (where population grows by an estimated average of 50,000 people a year) the number of homes possessing Certificate 16* increased by just 2,100 units in the period 2005 – 2007.
In 2005 the number of homes possessing the important certificate was nearly 523,500, in 2006 – 524,500, and this year it is just 525,000, Plevenliev pointed out. According to statistics 60% of people in Sofia prefer to buy their own home to renting. 2/3 of home purchases in the capital were made by Bulgarian citizens.
According to prognoses the market of residential properties in the capital city can grow at a minimum rate of 20-30,000 sold homes a year, at a slow price increase of no more than 10-20%. In 2004 home purchases increased by 46%, in 2005 by 36%, and in 2006 by 20%, which means this year's growth is expected at around 15%.
The most expensive homes in Sofia are in the area of the Doctor's Garden. Other expensive neighborhoods are Lozenets, Ivan Vazov, and Iztok). In June prices of apartments near the Doctor's Garden jumped rose from 1,600 EUR/SQM to nearly 2,000 EUR/sqm. Apartment prices in Iztok have increased by 500 euros per square meter.
Prices in Ivan Vazov area rose slightly and are still under 1,500 EUR/sqm. In June 2006 apartments in Lozenets were sold at below 1,000 euro per square meter, while this June all prices are over 1,000 EUR/sqm.
Note: *Act 16, or Certificate 16, is a protocol issued by the government after Act 15. By it, the builder certifies the building in front of the government authorities. A building can not enter into exploitation without it. Obtaining Act 16 is the last stage of the building process.