High Prices And High Expectations
The high prices of land mixed with high expectations of local entrepreneurs were the main problems of Bulgaria's residential property market. Pablo Rodrнguez-Losada general manager of Spanish developer Martinsa-Fadesa said on April 16 2008 as quoted by Dnevnik daily.
He attended the second regional conference Balkan Real Estate Conference (BalREc) held in Sofia on April 15/16 2008.
“The only way to beat this is to have clear and accurate information provided by municipalities about the legal state of the land” he said.
Bulgaria had to avoid Spanish experience where entrepreneurs worked based on their own expectations rather than on the reality of the market.
According to Rosen Plevnaliev general manager of Lindner Bulgaria the unreasonably high prices of land and the lack of proper infrastructure were also among the problems Bulgaria's residential property market faced. Both combined led to high prices of residential property.
“One can say that we have a balloon effect in terms of land prices”.
It was unfortunate that investors had to finance the construction of infrastructure and not municipalities, Plevnaliev said. This was another reason why prices have gone up.
Despite the problems participants agreed that Bulgaria's real estate market still had room for further growth in the next three years.
The market started growing in 2003 from a very low base and that's why it has further potential,” Plevnaliev noted.
He cited statistics according to which in 2003 Sofia had about two thousand newly built apartments while in 2007 the number was five thousand. His expected that in 2008 their number would reach eight thousand.
In general participants concluded that with the negative trend on the Bulgarian Stock Exchange real estate investments were still the safest investment one could make in Bulgaria.