Prices slow down

The higher levels residential property prices reach, the fewer buyers become. So far they have managed to fight rising values with growth of incomes, easier access to credit, lower interest rates and rising prices of all other properties (including their own) such as land and existing apartments. However, while interest rates continue to rise and make buyers more cautious, growth of development may slow down the prices of homes, located in ill-maintained blocks and some non-prestigious locations.
A research of property exhibition BalPEx shows about 65,000 new properties might well be built in Sofia alone in the 5 years to come. Strong supply is said to add 12% to the existing residential stock registered in the end of 2007. Some other 30,000 units might spring up in Plovdiv, Burgas and Varna.
Nevertheless, the real estate price growth remained strong in the second quarter of the year at over 30% in Bulgaria and more than 40% in Sofia compared to the same period 2007.
Contrary to this, we now see the first signs of a slow-down coming. A last month’s research of the Property Index magazine shows Sofia’s main markets offer 2- and 3-bedroom prefabricated panel flats priced at between 90,000 and 120,000 euros. Similar properties located in the suburban areas of Varna and Burgas cost less - 50,000-60,000 euros, which is close and even lower than average price levels in Q2 that used to be about 1,100-1,200 euros per sq m in Varna and Sofia and 760-870 euros per sq m in Varna, Plovdiv and Burgas.
But new builds and existing brick-built apartments with central locations maintain high asking prices. A 95-sq-m three-bedroom apartment on Tsarigradsko Shose Blvd. in Sofia was offered for 4,290 euros per sq m. The highest asking prices in the area of the Doctors’ Garden reached 5,000 euros per sq m for a 115-sq-m unit.
A 100-sq-m, partially furnished apartment in Gratskata Mahala, the prestigious residential area in Varna, was priced at 3,300 euros per sq m.
Plovdiv and Burgas still lag behind in terms of highest asking prices for existing properties with central locations. The most expensive units in the two cities rarely reach 2,000 euros per sq m.