Signs of recovery

Asking housing prices in larger Bulgarian cities are now stabilizing since vendors put up with the fact that values declined. In the cities of Plovdiv, Varna, Burgas and Sofia average prices of existing apartments have dropped down by between 29.9% (Plovdiv) and 14.5% (Varna) since their peak in Q3 of 2008. The annual decline registered in Q2 of 2009 is between 24.5% (Sofia) and 13.3% (Burgas), according to a research made by the National Statistical Institute of Bulgaria.
It took some time for the owners of residential property to realize that their property has indeed depreciated. Now, values are down by 15 to 40% compared to their figures a year ago.

The most expensive segment, which earlier saw asking prices reach 4,000-5,000 euro per sq m in the city center of Sofia, is now registering levels of less than 2,600 euro. The cheapest panel prefabricated flat in Nadezhda neighborhood (Sofia), made up of 95 sq m and located on the seventh floor of a building is now estimated at 525 euro per sq m. In the middle of 2008 it was impossible to find a similar dwelling for less than 700 euro per sq m.
Asking prices of new builds in the city of Plovdiv range between 650 and 1,190 euro per sq m and basically equal the prices of properties in Mladost neighborhood (Sofia) or the suburban regions of Varna.

So far, prices in cities on the Bulgarian Black Sea coast have been slowly declining. New builds have stabilized, so it is now quite possible to buy a home for just 1,000-1,200 euro per sq m in good locations, somewhere between city centers and outskirts. If you go to Varna’s Chaika neighborhood, you can find a 108-sq m, three-room tile apartment for 110,000 euro.

Despite the fact that smaller transaction volumes and rising availability of properties are putting pressure on the prices, real estate agents and vendors assume that developers, who aren’t forced to sell because of financial problems, will choose to wait. And if the number of these developers is sufficient, the market may recover in the coming months.