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Real estate prices in Bulgaria have dropped to 2007 levels

Date: 23.03.2009

Property prices are currently approaching the levels of 2007, according to analysis from Raiffeisen Real Estate agency, using cumulative data for real estate and pricing for the period 2006 through to 2009, Stroitelstvo Gradut reports. The fall is particularly noticeable in properties that fall into the most popular price range - ranging from 50 000 through to 70 000 euro.

In light of the economic crisis, the market in Bulgaria has been affected, and will likely continue to be so for some time. Prices throughout all market segments will be subjected to fluctuations, some milder in character, and some more violent, but the only sector so far that has remained immune to the is that of luxury estates. A major reason for this, as cited by the report released by Raiffeisen Real Estates, is a lack of equilibrium –there is still a stronger demand for such expensive properties than there is ready supply.

In the common real estate sector however, as of March 2009, the margin is about 20 per cent between the demand and contracted prices – this trend is attributed due to vendors' high expectations, and their reluctance or inability to adjust to the new-old market conditions and to the market's plunge back to levels last seen two years ago. Another major worry for sellers is that in spite of cheaper prices, there is still a significant reduction in demand and processed contracts – due to lack of credit and mortgage loans released by financial institutions.

In Varna – the biggest Bulgarian city on the Black Sea coast for instance, current trends are comparable to those in Sofia, with the average pricing for real estate being slashed back to 2007  levels, i.e 50 000 euro as opposed to 70 000 euro. Back then, this was sufficient to buy a two bedroom apartment. Similar cases can be spotted in other Bulgarian cities like Bourgas and Rousse.

The most substantial in residential real estate values was recorded in the summer resorts of Sveti Vlas and Slunchev Briag (Sunny Beach), the largest summer resort on the Bulgarian Black Sea. In those 'elite' resorts, prices have fallen to such an extent that currently there are brand new luxurious three-bedroom flats on offer for 70 000 euros. A similar fate has befallen the Alpine ski resort of Bansko, where new, completed modern apartments in 'key locations' are being offered for 70 000 euro.

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