The trends in Bulgaria’s real estate market are all negative, as sales volumes and prices have tumbled throughout the country. Many areas have seen sales volumes decline by over 50 percent, and there are no signs of stopping. The forward indicators of buildings under construction, and permits granted, have also been slashed. To learn more about the state of Bulgaria’s real estate market, see the following article by Property Wire.
The number of properties being sold in Bulgaria has fallen steeply in the first six months of this year and the volume of new real estate being built is also declining.
A series of new reports from the real estate industry show the full extent of the global economic downturn on the nation’s property market and indicate no signs of recovery coming this year.
Real estate transactions tumbled 35% year-on-year in the first half of 2009, according to data from the Registry Agency. The downtrend affected all major cities and seaside resorts, with Sofia, Varna and Samokov region, including upscale winter resort Borovets, collapsing by around 50%. The report blamed lagging investment activity and the global financial downturn.
While the latest report from Raiffeisen Real Estate shows that property sales are down on average by 42% with Sofia transaction volumes down 58%. It also found that sales were sluggish in the once popular Black Sea resort of Sunny Beach.
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The negative tendencies started in the third quarter of 2008 and continued to deteriorate in the first half of 2009, according to Ani Angelova, manager of Raiffeisen Imoti and executive manager of Raiffeisen Bank.
‘Potential customers at all real estate sectors are waiting, with the only active on the market currently being those with riskier profile, or who are ready to gamble with the prospect of improving their capitalization for the future,’ Angelova explained.
The National Association of Municipalities said that based on contributions to municipal budgets, property deals across the country had halved. Roumen Rashev, mayor of the central town of Veliko Tarnovo, said receipts had slumped by more than two thirds.
Figures from Sofia municipality show that deals in the first six months of 2009 fetched only 30 million leva, compared to 59 million leva in the same period of 2008.
The economic downturn is also affecting the number of property owners who are unable to meet their monthly payments. Figures show that foreclosures crept increased by 36.6% year-on-year and new mortgages shrank almost threefold.
Experts expect the number of new properties being built to drop off considerably because of low demand. Estimates from Acro Real Estate indicate a 25% drop in new construction projects to come onto the market in 2009.
Data from the National Statistical Institute shows that 3,897 new housing units had come to market in the first quarter of 2009 compared with 20,924 for all of 2008.
The number of new building permits granted halved in the first three months of 2009. Developers who have permits are holding off. Acro said this could create a vacuum with no finished new housing units appearing on the market in 2010.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.