The latest report from Colliers International has indicated that the average price of a home in Bulgaria has decreased by about 14 per cent in the first quarter of 2009 as opposed to corresponding figures from 2008. It also indicated that the country's construction sector has been hit the hardest by the global financial crisis as the drop in investment is expected to reach over one 1.2 billion euro.Regardless of the slump in value, however, or perhaps because of it, the report anticipated that the Bulgaria property sector will start to regain some ground and restore some of its lost value towards the middle and second half of 2009.
The reduction in value is attributed to two factors: first, the general decline in demand in light of the global economic downturn, and second, the larger supply on offer as a consequence of the ever increasing amount of completed construction on the market. The latter, added to already existing offices that were made vacant by companies departing as a result of poor business performance, has revealed new business opportunities.
The Bulgarian property market, which was considered to be one of the top property investment destinations in the world a couple of years ago, has since suffered, but a crisis inevitably spawns possibilities and opportunities for others. Moreover, there appears to be finally a light at the end of the tunnel, as the rate of decline in prices in Bulgaria will slow down and they will, slowly but surely, gravitate towards equilibrium. Since the beginning of the global economic downturn, the most drastic fall in international demand and a severe oversupply of homes has occurred on the Black Sea coast.
But Colliers Intenational expects that prices in Bulgaria will stabilise in late 2009 or, at the latest, the first quarter of 2010, in large part because construction levels have dropped significantly in Bulgaria, which caused the existing oversupply of residential stock to be absorbed, so easing some of the pressure on the market.