29.8.2007

Bulgaria housing prices rally still going strong

Data coming out of the Bulgarian realty agencies is not yet backing up the overheating warnings sounded off by Western analysts in their latest overviews of the Eastern European property market and the downward price correction that has been widely forecast.

Feedback from real estate agencies polled by Dnevnik suggest quite the contrary: prices are rising across all property market segments albeit slower than in the recent past.

The national statistical authority reported a 15% gain in residential prices for the first half of 2007.

In an overview of the Sofia residential market released Tuesday by realty consultancy Colliers International, the company reported a price growth of around 20% for some of the prime locations.

Colliers said the average asking sales prices in emerging neighborhoods in the southern part of Sofia are edging towards the 1,000 euro/sq m mark.

The more established areas such as Doctor’s Garden, Ivan Vazov and Lozenets saw solid double digit growth levels in the first half of 2007 with an increase in average asking sales prices of 19%, 11% and 19% respectively, said Colliers.

After a decrease in second half of 2006, Doctor's Garden compensated in 2007 and is now just below 2,000 euro/sq m. Iztok saw an impressive 51% increase in average asking sales prices year-on-year by the end of June 2007.

The supply of residential properties continues to increase at a steady pace, and the focus remains on planned communities and compound developments. This type of construction is mainly located in Malinova Dolina, Kambanite, Simeonovo, Dragalevtzi and Krastova Vada, but due to increasing land prices, new supply of housing compounds is moving further away from the city, said Colliers.

The price rally is not losing any steam, said Tihomir Tsakov, owner of the Aristo real estate agency. He expects no decrease in domestic property prices over the next 3-4 years.

Only certain niches like the holiday homes in overdeveloped resorts are vulnerable to a price pullback, said Tsakov. Elsewhere, holiday homes will remain steady at 1,000-1,300 euro/sq m.

Sales to property buyers from the former Soviet republics have doubled so far in 2007 in comparison with last year, said Elena Kogan from the Domika real estate agency. In addition to Russians, nationals from Lithuania, Latvia, Estonia, Kazakhstan and the Ukraine are also buying second homes in Bulgaria. They prefer one- or two-room beachfront apartments, paying around 100,000-120,000 euro per unit.(Dnevnik)


Source: Dnevnik