Bulgarian Housing Market Topping Out

April 27, 2005
The price of domestic housing units has peaked and will start to taper off in 2006, the National Real Estate Association (NREA) predicted on Tuesday, April 26.

A total of 198,000 homes were transacted in 2004 totalling 3.3 bln euro in value, up 31% over 2003, shows NREA data.

The average Sofia home sells at 600 euro/sq m, on par with the Bucharest market but twice as expensive as Ankara and Istanbul, said Eli Moneva, NREA managing board member and vice president of the Central European Real Estate Associations Network.

Properties in the Doctor's Garden neighbourhood in downtown Sofia have fetched as much as 1,400 euro/sq m, a price command by an average apartment in Brussels. That is a sign that some properties have reached their top selling price, said Moneva.

NREA chairman Orlin Vladikov expects old and pre-fab homes in Sofia and Varna to lose 20% of their current value in 2005.

The combined floorage

of housing units under construction in Sofia is 500,000 sq m, said Vladikov, adding that the domestic real estate market returned between 16 and 18% in 2004.

Commercial and office premises continue to be the most profitable segment. Commercial premises sell at 400 to 3,000 euro/sq m while rant rate vary between 25 and 120 euro/sq m depending on the location.

The sharp rally that Bulgaria's real estate market staged in the past couple of years was aided by the combination of several factors: high rate of return, influx of foreign investment in real estate, easy access to home purchase loans and Bulgarians' enduring desire to own their home.

Realtors expect the price of land plots suitable for construction in Sofia, Varna, Plovdiv and Bourgas to continue to appreciate, driven by the expansion of retail chains and the proliferation of hotel and residential developments along the Black Sea coast. (Dnevnik)