A MARKED GROWTH FOR THE REAL ESTATE MARKET SINCE THE BEGINNING OF THE YEAR
There has been a marked upward trend in the growth of the real estate market during the first half of the year. The statistics of the Registry Agency for the second quarter and the first six months of the year show that the growth rate in Sofia and Plovdiv has decisively outmatched that of the large cities on the Black Sea coast, such as Varna and Bourgas.
Even higher are the mortgage growth rates. On the one hand this points to intensified activity on part of real estate purchasers, on the other it also means that more and more people have taken advantage of the lower interest rates in order to refinance older credits. The data, however, does not differentiate between refinancing and other types of real estate transactions.
The tendencies on the real estate market may be outlined accurately according to the transactions in larger cities and regional town centres. The information coincides completely with the statistics of Iris Estates, as it has registered a considerable growth in inquiries, apartment and house viewing and transactions. Most probably the statistics are incomplete, due to the marked growth of transactions with real estate properties still under construction, especially in Sofia, as these transactions will be recorded by the Registry Agency after the Document for Construction Readiness of the Building (the so-called “Document 16”) is signed and the properties are handed over to the owners. We will be able to trace the impact of these transactions most probably towards the end of this year and the beginning of next.
In Sofia transactions point to a growth of 18%, whereas in smaller towns the tendency is the opposite.
In the smaller regional centres and towns the real estate market is on the decline. As a whole the real estate transactions in smaller regional towns have decreased. Exceptions from this tendency are towns such as Pleven, Stara Zagora, Russe. But these towns cannot compensate for the dwindling real estate market in the smaller regional towns where such transactions are sporadic against a background of higher unemployment, lower employment rate and deteriorating perspectives for the local economy.
In Sofia real estate transactions have risen with 18% compared to the first half of last year. With mortgages the growth is even higher, over 28%.
Which city districts do the customers of Iris Estates prefer?
In Sofia the clients’preferences are downtown Sofia, the districts of Istok, Izgrev, Lozenets, Vitosha, Dianabad, Oborishte, Manastirski Livadi and Geo Milev. A marked growth of real estate prices for the first six months can be attributed to such districts as: Istok, Mladost 4, Musagenitsa, Oborishte, Malinova Dolina, Kambanite, Bistritsa and Pancharevo. The district encompassing Oborishte Street, the National Library, Sofia University, Shipka Street, known as the “Doctor’s Monument”, in downtown Sofia maintains the highest price range per square metre floorage.
A continuing increase of transactions for real estate properties with two bedrooms as compared to those of one-bedroom flats has been noted. During the second quarter of the year the share of Iris Estates’ real estate property transactions with two or more bedroom flats has slightly exceeded that of transactions with one bedroom flats.
Among the one-bedroom flats, the customers’preferences are towards flats with a floorage space of 55-56 square metres and within a price range of 800 – 1000 Euro per square metre. The real estate properties with two bedroom flats sold are with a floorage of 85-100 square metres and prices ranging from 800 to 900 Euro per square metre.
In Plovdiv the rate of transactions for the first half of the year of 2015? is much more moderate in comparison with Sofia 0 - 2.7%, up to 7143 transactions. The mortgage rate, however, has reached 14%, up to 1714 transactions.
The rate of growth of transactions in Varna has increased with 1.6%, less than 5 thousand transations, whereas the increase in mortgage transactions is 19%, slightly over 1800 deals.
The real estate market in Bourgas is lagging behind
The lowest transaction growth in the larger Bulgarian cities is registered in Bourgas – only 0.4%. The real estate market in the city and the region has remained comparatively stable notwithstanding the withdrawal of Russian purchasers of vacational real estate properties within the region. But with mortgage transactions the increase is 23% - a clear sign of increased refinancing activities.
In the remaining regional town centres there has been a decline of 6% in the real estate transactions for the period January – June of this year compared to the same period last year. Only the industrial centres of Stara Zagora, Pleven and Russe, as well as Pazardjik, because of its closeness to Plovdiv and thousands of workplaces, point to a rise with moderate growth rates. The tendency for the remaining real estate property markets in the country is towards a gradual decline.