Transactions in Real Estate Market Down by 42%

Transactions in Real Estate Market Down by 42%

The number of transactions in corporeal immovables in the first half of 2009 dropped by 42 per cent nationwide and 58 per cent in Sofia, compared to the like period in 2008, experts from Raiffeisen Real Estate said.

The experts reached their conclusions on the basis of official data of the National Statistical Institute (NSI) and a survey among real estate companies and developers. The current market of corporeal immovables is the same as in 2005.

The experts noted that prospective buyers of all types of real estate have chosen to wait. The only active participants on the market are investors with more risky profiles looking for long-term opportunities to enhance or improve their portfolios with corporeal immovables at affordable prices.

With the exception of the planned expansion of big commercial chains, since the start of 2009 there has not been a single investment into the sale or purchase of land plots for a future big project, the Raiffeisen Real Estate experts said.

NSI reported Monday that the market prices of homes in the second quarter of 2009 dropped by 9.7 per cent compared to the first quarter.

The average market price for residential area in the second quarter was 1,074.98 leva/sq m. Highest was the price in Varna, on the Black Sea, 1,827.00 leva/sq m, followed by Sofia, 1,745.00 leva/sq m, and Bourgas, on the Black Sea, 1,471.67 leva/sq m. Kyustendil, Western Bulgaria, had the lowest price of 540.85 leva/sq m.

An analysis into business mortgages conducted by Creditex shows that the prices of residential property drop faster than rents, which increases the current rate of return of investments in real property.

The average current rate of return of residential property in Sofia in the first half of 2009 stood at 4.5 per cent on an annual basis. The like figure in the second half of 2008 was 4.1 per cent.

Source: BTA

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