When one gets used to a situation – and the situation continues for years, – it is hard for him to accept the change. Even when the change is a positive one. But, after the encouraging signs of 2014 and the good 2015, everyone is now getting used to the change of the property market in Bulgaria: the sector has finally revived and is making a stable, predictable growth.
The statistics, summed up during a thematic meeting on the property market in 2015 and the sector's trends in 2016 organised by leading estate agencies, organisations from the sector and Imoti.net is explicit. In the big cities of Bulgaria the property deals have increased with 20-30 percent. The prices are also on the rise, in the big cities the growth is in the range of 8-10 percent. According to prognoses, the trend will continue in 2016, with projected rise in the prices of 4-7 percent.
The increased demand has logically led to activation of construction of new buildings. In 2015, the number of issued building permits doubled the one from 2014. In the past year, the construction of residential properties "frozen" due to the crisis has revived. The sales of properties under-construction are also on the rise – after the crisis cleaned up from the market the indecorous developers, more clients now trust in the building companies for the timely and quality completion of the projects they have invested in.
The change is visible in the rents, too. The small flats in the big cities' centres are very popular and due to the limited supply, rents are already in the range of 3-5 euros per square meter.
The restored property market in Bulgaria, however, is not like the one before 2008. The situation has changed and this is mirrored in the main trends in the sector.
One of these is the increased exigence of the buyers, who now insist on quality construction. Few people now buy no matter what, and more clients are after projects that are functional, well-built and with good infrastructure. Interest in gated communities is also on the increase, in spite of the traditionally higher prices of this kind of property. The advantages are easily recognised: closed complexes are safer, have their own parkings, parks and gyms, and are at quiet locations far from the noise and the pollution of the big cities.
The demand for clean nature and tranquility, combined with the improving infrastructure and road connections, determines as well the fact that some of the clients move to properties in the cities' outskirts or satellite villages. The trend is strongest around Sofia, where the real estate prices in the near villages are on the rise.
Of course, not all village properties are the same. The interest in village real estate in underdeveloped regions and far from the big cities decreases for a number of reasons: insufficient local infrastructure and need of serious investments in order to make an old house inhabitable. Unlike the pre-crisis years, fewer people from the West are enthusiastic to buy a village house in Bulgaria. This has led to about 10 percent drop in the property prices.
The future of holiday properties, especially those on the Black Sea coast, is optimistic. After a decrease of the Russian investors in the past year, the trend is now bound to change. The reason is the political tension between Russia and Turkey. As a result, the Russian buyers looking for a second home by the sea will likely return to the Bulgarian property market.
The change in administrative and business properties is also impressive. The reviving Bulgarian economy and the foreign investors need adequate buildings in order to develop and expand. Logically, by the end of 2015 most of the class A quality business space is already taken. Significantly, even administrative buildings in Sofia that are still under construction and will be completed in 2016-2017 are already sold out or rented.