Encouraging news is arriving for Bulgarian property. This comes along with data in the UK from more estate agents that house prices are slightly on the move, with the Halifax reporting a sixth successive increase since the massive low during spring. Some Bulgarian banks have already reduced interest rates and the Government has called for a 3% plus reduction in mortgage rates. A few banks are lending up to 80% of the property price - not witnessed since summer last year, although stringent income and property criteria are still applied.
The Bulgarian Central Bank also said in its quarter report that lending volumes may increase slightly from the start of 2010. Property price falls are slowing down, with the National Statistics Institute reporting only a 5% drop this quarter, compared with 10% falls during the previous quarter.
During the recent BalRec real estate conference in the capital, Sofia, Kristofer Pavlov from UniCredit Bulbank said that he believed there would be no more than three more quarterly price falls, so the market may pick up from mid next year.
The news today that amendments to the Notaries Public Act are going to make bank payment compulsory for all property transactions from January 1 2010, will also build confidence in the Bulgarian property market and make property transactions more transparent.
Now, whilst demand has clearly decreased, so too has supply of real estate, with many vendors preferring to 'hold' rather than sell in such a depressed market. This means that falls in prices are continuing to slow and prices have become realistic. It is the gap between the prices vendors want and the prices buyers will pay which has been the biggest stumbling block to actual transactions. This gap is closing, providing a potential situation for gradual market recovery during the second half 2010 onwards.