Orange Estates

Deals with estates for more than 11.3 billion EUR are expected in Bulgaria till the end of the year, reported the director of the agency Yavlena Strahil Ivanov during the Tenth economical forum in Sofia. The market is on the point of registering a new record, when reaching almost double growth towards the level of 6.4 billion EUR in 2005. For the last year the turnover was a bit over 9 billion EUR.
Tendency

According to the brokers the growth of the estate market is a result of the continuing raising if the prices. In the residential property branch for example is expected a getting up in the big cities between 20% and 30%. According to Yavlena in the first half of the year the average of the homes in Bulgaria has reached 1041 leva/sq.m. in comparison with 846,5 leva for the past year.
Statistics

At the expense of this the amount of the deals is decreasing and it is expected till the end of december this amount to be less than 300 thousand. The last months of 2006 were peak for the property, because people were pressed of buying because of the expected growth in the prices in the EU. That is how it reached 311 thousand deals, while this year the market is calm and we expect them to be 292 thousand , comments Strahil Ivanov. According to him the holding back factor is the small rise of the interests in the mortgage credits. As a whole the market is ascending.
Prognosis

The boom on the property market in Bulgaria hasn't finished , it is now beginning, comments the executive director of Colliers International for Bulgaria Atanas Garov. According to him the search is growing up in all of the branches of business property – offices, trade and store areas. Last year were demanded about 100 thousand sq.m. Offices, and this year – 120 sq.m. The companies are expanding , there are also new and the market needs more areas, he comments. Similar is the tendency with the market areas, which fast growing up is related to the purchasing power. With the development of new projects in the next 3 to 5 years is expected to grow up and the offering of business properties, which is low in East Europe.

Because of the limited supply of plots in the center of Sofia and the quicken interest in them the prices from the beginning of the year grew up vastly, comments for Pari newspaper Svetoslava Georgieva, operative director of the real estate agency „Adress“. That is why despite the interest of the investors they wait the development of the market. Another problem is that a plot often has many owners and this is making more complicated the decision about the selling price.

According to Adress only in the first 9 months of the year the prices of the homes in the central part of Sofia has grown up with almost 30.7%. The average price of the nine month period is about 1330 euro/sq.m. Most wanted from the buyers on Vitosha Bld, Hristo Botev Bld and Al. Stamboliyski Bld are the studios, or two room apartments with little total surface up to 65 sq.m. In the most prestigious and expensive area – Doktorski pametnik , are wanted larger and luxury apartments. The supply of these apartments is limited on tradition.

Big part ot the buyings of homes in the center is with the aim of investition, said Svetoslava Georgieva. The main interest is in old building, which needs repairs, but is offered on good prices. After the repairs the property goes on the market of rentals for 1-2 years and is being resold, but on a price 50% higher than the first one. In comparison with other regions of the capital, where most of the deals are done with credit , in the center they are much less.

The amount of deals in Sofia, Varna, Bourgas has decreased with 4%, while in other regional cities the decrease surpasses 16%.

Despite this for 2007 the real capacity of the market will reach 11,359 billion euro, while the officialy announced is 5,658 billion, said Ivanov. According to him this means that the transparency of the market in this year will increase nearly 50 %, but aalso half of the money stay in the grey sector.

Barely 38% of the made deals in Bulgaria pass by the agencies for real estates according to the information of „Era Bulgaria“, the local representative of the international chain of independent agencies , working under the trademark of ERA Real Estate. For comparison – in Great Britain and Ireland, where this percentage is the highest in Europe, nearly 90% of the transactions are made with the association of real estate consultants.

In 2007 is kept the tendency from the past years of increasing the amount of deals with mortgage financing. For a period of one year their amount has grown up from 81 thousand till the middle of 2006 to 89 thousand an year later.

The increase of the interests on the loans, as a result of the measures, taken by the Bulgarian national bank , influenced a lot the credit financing, thinks the executive director „Era Bulgaria“ Teodora Dimova. Increasing of the interests is going to touch sensibly the credit receivers with relatively low income.

According to Strahil Ivanov the main factors, which could slow down the market, are increase of the bad credits, increase of the interest percentage, decrease of the capacity of the credititng, the negative growth of the population,the lagging in the growth of the rental prices towards the selling prices of the estates and the appearance of distinctive disbalance between the income of the bulgarian and the prices of the homes.

The discrepancy between the income of the household in the country and the prices of the real estates is one of the main problems of the economics, announced on the forum Fabricio Coricelli, director of researches of the European bank for recovery and development. „The fast growth of the sector of real estates in Southeast Europe could be dangerous for the countries of the region“, said Coricelli, repeating the warnings, made in the last edition of the report for the countries in transition of EBRD.

The participants on the bulgarian market don't share such fears, because they consider, that the basics are stable – there is wide demand, which grows up, and supply, which doesn't attempt to answer, and in condition that the prices of the homes are in the bottom of Europe.

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PROPERTIES RUN 11 BILLION EUR

The limited supply rises up the prices in the central part of the capital

Half of the deals in Bulgaria stay in the grey sector