Real Estate Market – Bulgaria 2007

Due to the vast amounts of enquiries and the ongoing interest in Bulgarian real estate the sector is still booming.  The sector has registered a 25% growth in price during the last 12 calendar months and is ranked at the top of European property investment funds.  In general, property prices registered the highest increases in Eastern European counties.

As well, Bulgaria is still considered one of the countries with the lowest real estate prices in all of Europe.  Private as well as corporate interests have continued to increase. Due to the high demand for real-estate in the last few years, there is heightened demand for quality properties. Even though Bulgaria does not give an impression of a highly developed European state, the country has emerged as pearl of the property market.  It is envisioned that Bulgaria would become Europe's property hotspots in the coming year.

As well, the country enjoys solid economic growth and stable currency. The increasing levels of foreign direct investment (FDI) indicate that there will be an upward drive of demand for property. The highest growth in newly built retail properties will be registered in the new member countries by the end of 2007. Trade centers covering a total area of 98,000 m² will be built in Bulgaria by the end of 2007 – contributing to the estimate that retail property growth will exceed 100% by the end of the year.
Presently, Bulgaria is following the footsteps of all Easter European countries that previously joined the EU – where property prices have risen dramatically.

2006 Stats & Highlights

• The number of real estate transactions in Bulgaria in 2006 rose by about 15% – reaching nearly 280.000.

• This ranks Bulgaria 6th in the world in volume of foreign investment in real estate – which is a mirror image of its market.

• The number of Russian buyers in Bulgaria doubled last year – with interest in upscale properties around the coastal areas.

• The overall increase of housing prices across the country was 12,07% in 2006, to from 557,53 €/m² ► 624,83 €/m²

• Prices in Varna went up by 10,33%.

• The majority of property transactions last year involved housing.

• Demand was highest for one-bedroom apartments but supply was slim, pushing the price up by nearly 15%.

• The majority of buyers were in the 26 – 45 year age bracket.

• Deals using a bank loan rose by 40% from the year before.

• The farmland market also showed signs of development last year. In most transactions, investors bought land to build on. Further development of this market segment is strongly impeded by the fragmentation of the land plots.

• In 2005, 600 million m² of agricultural land were sold – this figure jumped to 1 billion in 2006.

• The expectations for this year include further increase of prices, within the range of 10% – 15%. The increase will be steepest for luxury housing properties.

• Heightened interest is also expected for middle-sized lodgings, office and industrial buildings.