In the first quarter of 2018, the largest percentage of transactions were concluded at an average price of between EUR 50,000 and EUR 70,000.
In order for homes in Sofia to be as affordable as before 1989 in terms of a ratio between wage levels and property values, the average price per square meter should be around 620 euros per square meter, and now it exceeds 1000 Euro.
There are three types of buyers of residential properties in Sofia. The first are mostly young people between the ages of 30 and 40 who have a real need for housing (about 80% of the clients), the second type are people who sell their home to get bigger and the third - customers who buy property for investment purposes (about 18%). This means that at least another ten years in Sofia and the big cities will have a real need to buy a home.
Much of the building stock is outdated, panel buildings are already nearly 50 years old, so their owners will probably want to move to a new home. In recent years, a new market niche has emerged, involving Bulgarians living abroad who return to the country in July and August and want to invest their money in property in Bulgaria. In most cases, they subsequently rent or buy a home for their parents.
The first three questions asked by customers before buying a home are how much it costs whether bank lending can be provided and what materials will be used in the construction. Most customers are already informed and are interested in the method of payment, the way of building the project and the quality of the building materials. Good environment and security are also a very important element in the choice of housing, as the residents of the closed complexes are mostly young people with children. Young people are looking for mostly liquid assets that can quickly resell to reduce the level of risk.
Construction entrepreneurs are firmly convinced that in recent years the quality of the construction has improved significantly and this is visible from the facades of the buildings. The materials and technologies in the construction process are at European level. Changes have also occurred with respect to architecture with a reduction in the area of the dwellings. For example, the three-room apartments, which by 2002 had an area of about 100 square meters and today do not exceed 85 square meters.
Infrastructure - the responsibility of the municipality or entrepreneurs?
Entrepreneurs are of the opinion that there is no modern environment in Sofia because of the erroneous urban planning after 1989. Because of the planning of a piece, beautiful buildings were created, but they are not harmonious as a complex and do not create a comfortable and normal environment.
The municipality does not perform its main function, namely to build infrastructure such as kindergartens, polyclinics, schools along with roads, lighting, etc. Currently, 80 euros per square meter of living space goes to the state treasury in the form of VAT and profit tax .
The funds should be used to create an acceptable infrastructure. In order to create a harmonious and normal environment, a comprehensive planning of the territory is necessary, which is sustainable and can not be changed for at least 20 years. The situation is also the reason why most properties are currently being searched for in closed complexes.
Much of the responsibility is left to the hands of investors who have to assess how to adapt their project to the environment.
Investors are of the opinion that the municipality is not an active player on the real estate market, but they can still make a choice where and how to invest.
The problem of the risk that home buyers take on green should be at the heart of the concerns of state and municipal authorities.
The National Building Contractors Association supports the French model of insurance premiums that ensure that if the developer fails, customers will get their money back. Thus, the industry will be cleared by unscrupulous players, as in failure, they will not get an insurance premium for a next project.