Housing Prices in Bulgaria Continue to Decline
Between January and June, housing prices decreased by 23 per cent on average compared with the same period of 2008. Experts expect prices to continue to decline at least by the end of the year.Overpriced properties in the bigger cities have fallen by 30 per cent or more. In Sofia's residential areas of Lyulin, Drouzhba, and Obelya an apartment in a pre-fab construction block costs 30,000 euro. In the Borovo residential area properties sell at 650-660 euro/sq m, where a year ago prices exceeded 1,000 euro/sq m.
Housing prices in the Student Town have decreased least, below 10 per cent.
In Sofia and Varna over the past two months demand has grown after lending eased and buyers are convicted that now there are good value for money offers.
According to a survey into what drives people to sell, 32 per cent say they have money troubles, which they are trying to solve by selling unused property. Only 17 per cent are forced to sell for falling behind on mortgage payments.
Properties with prices close to their market value will continue to sell, while those whose price is upped will be on the market for months.
It is still too early for properties to sell at their cost, with no margin for profit. On average, a square metre costs between 350 and 400 euro, experts say, but new construction is offered at 700-800 euro. Construction companies, having concluded deals at 1,000 euro/sq m, are able to wait until the crisis is over and not lower prices, experts say.
Purchases of newly constructed property make up just 20 per cent of all purchases over the last six months and continue to decline.
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