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Polina Stoykova: Housing market in Bulgaria has calmed down

Photo: BGNES

In 2019 the property market in Bulgaria has calmed down after several years of sharp increase in housing prices. Now we are witnessing a moderate increase in the property prices in this country and market demand and supply are about to reach a balance, the Executive Director of Bulgarian Properties real estate company Polina Stoykova said in an interview for Radio Bulgaria and added:

Housing prices in Bulgaria’s biggest cities went up 5%-6% this year. According to our latest data, the price increase in the capital Sofia has been insignificant. In Bulgaria’s second biggest city Plovdiv, the property prices saw 6% increase and the housing market there has also slowed down, because last year property prices in that city increased sharply by 15%-16% on an annual basis. In the coastal city of Varna, housing prices have increased with 3%-4% this year. As a whole, the property market in 2019 is very balanced and well-functioning and the volume of sales has increased in all big cities.

The average price in Bulgaria’s capital Sofia is nearly EUR 1090 per square meter and fluctuations as compared to last year are quite insignificant. In Polina Stoykova’s words, the market is somehow unwilling to cross the EUR 1,100 threshold. Apparently, the balance point is near this value and I think that the housing prices in Sofia will not be much different in 2020 and we may witness a maximum increase of 1%-2%. The Executive Director of Bulgarian Properties contends that the trends on the property market will remain positive in view of the low interest rates on the mortgage loans and the extremely low unemployment. It is more important to watch the unemployment rates, rather than the interest rates in the coming years. Currently, unemployment in Bulgaria is at record lows. If unemployment begins to soar, this may send alarming signals to the real estate market as well, Polina Stoykova adds.

Have investors started to plan and build properties with smaller size, given the continued high demand on the housing market?

TheCustomers mainly look for and buy two and three bedroom flats. 40% of all customers buy two-bedroom and another 40% prefer three bedroom apartments. In most new buildings, investors reached a good balance between two and three bedroom flats. The two bedroom flats are the most-liquid asset on the property market and usually sell out first, sometimes even before the first sod is turned. With regard to the space, the buyers showed that they prefer functional flats and symmetrical rooms, so that the whole space is used. People now are very well-informed and know what is the percentage of the common parts, because the total size of the new homes includes and is sold together with the common parts as well. However, the Bulgarian investors, builders and designers have already learned to build homes with well-distributed and well-planned rooms and a good balance between the size of the common parts and the size of the flat itself.

Are foreign buyers returning to the Bulgarian housing market after the large-scale withdrawal in the period of the world economic crisis?

The situation around Brexit has not allowed the British citizens to return to the Bulgarian property market. The situation with the other large group – the Russian buyers, is not that favorable either, because their national currency has depreciated in the recent years. These two big groups have not sent us clear signals when and to what extent they would return to our property market. However, I should note that as a whole, foreign citizens from different counties, mainly European countries, have been recently showing steady demand. The property deals along the Bulgarian Black Sea coast and the mountain resort of Bansko are mainly signed with foreign nationals. Against the backdrop of increasing prices in all Bulgarian regions, an interesting micro housing market has occurred in the coastal resorts of Sunny Beach, Nessebar, Balchik and Kavarna, where demand fell and the market is now in stagnation. In 2019, the housing prices there have fallen slightly and currently it is very profitable to buy a holiday property at the seacoast, because prices are quite attractive, Polina Stoykova says.

English version: Kostadin Atanasov

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