In early 2017 many brokers predicted the development of property market prices.
The average forecast, as the appreciation opinion was categorical, was about 7-10%.
However, this was largely the case for several regions - Sofia, Varna, Plovdiv and Burgas. These markets also have the highest number of deals during the year. Given the differences in the different regions, there were forecasts for lower price growth in Varna and Burgas - some forecasts showed a 4-5% increase on an annual basis.
Let's see what brokers knew and what they did in January 2017. First, the appreciation of properties exceeded their expectations. The average increase for these regions is 12-14% on an annual basis.
Their expectations for Varna and Bourgas were also unfortunate - and in these areas the appreciation was close to 10%. Only in smaller towns such as Stara Zagora, Rousse and Pleven the price is limited to 4-5%.
The average square footage in Sofia transferred 1,000 euros and the average value of transactions in the capital reached 93,000 euros, compared to 74-80,000 euros a year ago.
The deals for sale of properties have also increased. In Sofia there are 7,200 deals on the Interim Data of the Registry Agency. The most expensive properties in Sofia do not change their location - Lozenets, Strelbishte and Gotse Delchev are other regions with close average prices. Neighborhood Ivan Vazov has not been commented by the real estate brokers, because something rare for sale is rare here.
Offering property is still bigger than demand. There are also unofficial statistics that nearly 24% of the housing stock is empty and locked. The reason is clear - the investment in property guarantees the retention of the money and the increase of the amount invested with the price increase. Especially if the property is in a prestigious area, a well maintained building and a real price.
Another feature of the property market in 2017 was a change in buyers' composition. the penetration of foreign capital that we observed during 2007-2008 has already passed.
For 2017 foreign investment in property in Bulgaria fell by nearly 84%. Net receipts from investments of foreign companies and individuals in real estate in the country for the first ten months of the year were EUR 9.7 million, compared to EUR 60.4 million in the same period of the previous year, BNB said.
Russians, Ukrainians and Germans are the three groups of foreigners still on our market. However, Bulgarians remain the largest group of buyers, and this trend will increase.
What to expect in 2018?
The options are two, brokers comment. The first, to continue the appreciation of properties, while buyers reduce for purely financial reasons. Especially if interest rates go up, as expected by many analysts. Bubble inflation can not last long, and although some expect it to happen in 2019, the first signs can not be seen next year.
The second option is to keep the appreciation at moderate rates - say 5-6% on an annual basis - and mortgage loans remain available to the largest group of Bulgarian buyers aged between 35 and 40, with good work and incomes above average for the country. In this case the year will go smoothly, the market will move upwards, but there will be neither a bubble nor a panic.
Sofia and Varna remain the regions with the highest prices and most deals. But the capital has an average square price, as well as an average transaction price. Prior to the 2008 crisis, Varna was ahead of Sofia on these benchmarks.
Realtors advise when buying a property next year to look at several major factors. In the first place, the proximity of the metro becomes more and more important in the context of road traffic congestion in Sofia.
Secondly, the state of the building, who is the builder, when built, are the anti-earthquake requirements, how common parts are maintained.
Thirdly, the condition of the particular property must be assessed and a master's estimate made of how much it will be worth repairing.
Of course, buying a property is an individual solution, but if things are weighed carefully, one can save a bunch of trouble afterwards.