Way to quality

The industry needs clarification of the standards for both real estate and the related services in order to protect the consumer

Besides all others one of the effects of the crisis will be to make more visible the differences in the quality of properties. Vendors will find it much harder to convince buyers to pay a particular price per square meter, while they have much more options and new developments offer them more extras free of charge: from finishing to underground parking.
Yet this process brings the clear risk that "accidental" developers could lower the quality a lot in order to achieve more competitive pricing. The problem with the standards of the real estate on offer and the related services has not found a solution so far.
"The existing residential stock (without new-builds – n.e.), which is available, conforms to absolutely no contemporary criteria for exploitation reliability and energy efficiency," says Toni Tonchev, a partner in development company Torin.
While prices of all properties were growing this didn’t seem to be such an issue. But when the market starts to falter for the end users it becomes much more important to delimit quality from non-quality development.
"When they are choosing, clients should pay attention mostly to the quality of the project, its technical properties, for the infrastructure and the surrounding environment," says Mihail Chobanov, general manager of Bulgarian Properties, the real estate agent.
He recommends them to look for advice from specialists – legal and property consultants and as well to be careful and to assess the risks, especially in off-plan purchases.
According to Chobanov, Bulgaria has solid base for consumer protection and from then on each side in a property transaction should take care of its own interest. The current situation would be favorable to do that as developers have to offer more and more to attract clients to their projects.
"We expect segmentation of residential supply. The new trends will include better quality of construction, better infrastructure near residential areas and better social and natural environment," says Valeri Atanassov, executive director of development company Soravia Bulgaria.
Yet, this will leave a loophole for incorrect firms. "The interest of the consumer has to be protected by the legislation in Bulgaria and by the controlling bodies in construction," says arch. Georgi Nikolov who specializes in buildings with low energy consumption. "I seriously doubt whether these regulations are properly functioning, whether controlling organs are exercising control and if the consciousness of investors and developers is up to the mark," he adds. Mr. Nikolov’s aim is to see the introduction of a standard for the energy consumption of buildings so that their occupants will be clear about the operation qualities of their properties.
"The time when investments will be carefully evaluated in respect of property merits will soon come: what construction standards the projects meet and whether they are certified; what insulations and construction systems have been used; whether the buildings’ coating has been designed smartly enough; what the annual energy consumption of the building is, in other words how much it would cost to run it – BGN 2,000 or 200 per 100 sq m per year," the architect says.
And not last, the industry is striving to introduce additional regulation not only for the properties but also for the services connected with them. "The moment has come to exercise control to the maximum extent on who and how will work with real estate and will be an agent, says Toni Tonchev. "It is not normal for a real estate appropriate for investment to be on the market within the price range of between EUR 500 to 1,500 per sq m. This is insanity, which has additionally crushed the market."

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Arch. Georgi Nikolov: Investments to be made in accordance with the property quality
Valeri Atanassov, executive director of Soravia Bulgaria: We are positive that new industrial and office projects will be needed
Tsonko Tsonev, Mayor of Kavarna: Better synchronization between municipalities and the state is needed
Evgeni Vasilev, general manager, Arco Real: Faster administrative services even at higher cost
Mihail Chobanov, general manager, Bulgarian Properties: Residential policies should stimulate young people and keep them in Bulgaria
Tsvetelina Taseva, executive director, Address Real Estate: State interventions should be precise to the maximum level
Toni Tonchev, general manager of development company Torin: Let’s take advantage of the crisis and put the branch in order
Mauricio Mesa Gomez, regional director, Bulgaria and Romania, Hercesa Internacional: VAT on property in Bulgaria is too high
Stefan Sharlopov, owner of Sharlopov Hotels: We have to be creative in the time of crisis
Bogomil Manchev, executive director of Risk Engineering: Completing large-scale infrastructure projects will bring good results.
Kalin Peshov, executive director of Glavbolgarstroy: In one-year time the market will stabilize
Lachezar Bogdanov, economic analyst, Industry Watch: Reforms to facilitate investment have to continue
Georgi Angelov, senior economist at Open Society Institute:Reasonable macro policy is what prevents economies from serious crises
Rosen Plevneliev, general manager of Lindner Immobilien Management:Factories have to come to the front.