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Property Focus: Varna Vanquished Sofia

Newly-built apartments in Varna were more expensive than in Sofia in 2007. This was because of the limited supply in the coastal city, Stroitelstvo Gradut weekly reported on March 10. Residential property prices in Sofia saw a greater increase than those in Varna, 45.7 and 33.9 per cent, respectively. However, the average price of new apartments in Sofia was 1043 euro a sq m, compared with 1188 euro a sq m in Varna, data from Varna-based Foros real estate agency showed.

“The main reason was the lack of large-scale residential complexes that were being developed now in cities like Sofia and Plovdiv,” Dobromir Ganev, managing director of Foros agency said. “There were several gated complexes in the planning stage in Varna, but they won’t be built soon,” he said, as quoted by Stroitelstvo Gradut.

One of the main trends on the property market in 2007 was the interest in older brick buildings. This was because a smaller part of common areas were calculated in the price and the lack of newly-built apartments.

“There were buyers that simply preferred older buildings and those buildings are located in the central areas of the cities, where supply is very limited,” Ganev said. There was the greatest under-supply in the centres of large regional towns. This had lead to buyers looking for properties in the suburbs.

Other property brokers, such as Address and Yavlena, have also identified this supply-demand gap, Dnevnik daily reported. According to Foros, the interest in suburban areas will continue to grow. Last year saw a significant increase in the demand for homes near major lifestyle, office or transportation hubs like metro stations and business parks in Sofia and the shopping districts in Varna. In Varna, buyers focused on the Mladost and Troshevo neighbourhoods. The districts have been developing as commercial areas in recent years, driven by the several shopping centres that are being built.

Interest in pre-fab apartments remained very high, Foros data showed. There had been a dramatic increase in the prices of these types of apartments in Sofia, Varna, Rousse and Veliko Turnovo. Prices were already comparable to those of newly built and older brick buildings.

Pre-fab apartments met the needs of a particular section of the market. As a result, the prices of these apartments exceeded 1000 euro a sq m. The agency forecast a 10-15 per cent increase in housing prices in the big regional towns in 2008, and that demand for suburban housing would stay buoyant.