With all the global markets being badly hit, we take a look at the current situation for Bulgarian property and real estate. The six years before the crisis saw investors from all over the world scrabbling in their haste to grab a slice of the property pie and the rush was not much more furious anywhere than in Bulgaria. The number of properties sold these days has fallen and there is far lower demand, the effects of which are being seen all over Bulgaria. However, for buyers, prices are now incredibly low so, is this a time to buy? Vendors are grappling with their own financial problems, some having to prop up their situation back home, and reduced demand with less buyers in the market. Whilst a couple of years ago 70,000 euros would have been hardly enough to buy a small off plan apartment in the capital, today this money will easily get you a 100 sq.m flat in a decent part of Sofia. Purchasers seeking off plan have dwindled and consequently prices in Sofia for this type of property have fallen considerably. Buyers are sticking with completed new builds, where prices in the best areas of Sofia, such as Lozonets, are still at about 1,000 euros sq.m.
Agents and analysts in Bulgaria are predicting that there will be a recovery early 2010. Certainly, buyers are emerging now that property prices are down some 20% overall and even 30% in some parts of the country. There are both motivated buyers, because of low prices, and motivated sellers, who have their own financial problems. The number of new build homes in the first quarter of this year was 43% less than at the end of 2008. There are also less homes coming onto the property market for sale. It is possible that with less new builds and resales available a vacuum could appear in 2010. It may not be the moment to go mad and buy up a ton of Bulgarian property but it may be the right moment to take a serious look as prices may not be this low if you delay too long.
After the years of large-scale cheap-build developments, the trend is definitely towards small developments of higher quality. In part, no doubt this is due to the global credit situation but it is also down to a more discerning buyer. James Gonzalez, market analyst at Obelisk International believes that a move to smaller homes is good sense, "In a changing market, for every problem that might arise, so does a new opportunity. It is at times such as these that the most innovative minds come to the forefront. The ability to adjust to changing market condisions is central to successful buying in today's climate". The trend is backed up by the latest stats, which show that the Bulgarian building permits recently issued were for built-up space some 29% smaller than previously.
Rural property has remained fairly static by comparison and proven to be a safer bet than all the off plan and new builds. Prices overall have reduced but the countryside has not seen the swingeing falls that the over-built coast and ski resorts are experiencing. This may well be because in general, those buying in the small towns and villages are lifestyle buyers and these areas were not on the radar of the 'investors', with their calculators in hand.