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Bulgarian Property Prices Up 22% Jan-sept 07
Bulgarian property nation-wide prices jumped 22% in January-September 2007 to around 1,120 BGN, shows data released by Bulgaria National Statistical Institute on Tuesday.The biggest hike - over 45%, was registered in the city of Vidin, North-western Bulgaria, followed by Sofia with 34%.
The price increase in the first nine months has already beaten the forecasts for a full-year gain of 15% made in early 2007.
The residential market in Vidin has seen the highest price increase in Q3 with 20%, followed by Sofia with 15% and Blagoevgrad with 12%.
The latest gains reinstate Sofia as the nation’s most expensive housing market with an average price of close to 2,000 BGN/sq m. It leapfrogs Varna, taking a lead of more than 150 BGN/sq m on average over homes in the coastal city.
Property agents explained the surge with the fact that, in an overwhelming number of cases, the full price of the property transactions is being reported to the Public Registry offices.
Over 80% of the residential market is loan-financed and the banks prefer to have on paper the real price of a property.
Rising inflation and food prices act as an additional incentive for people to invest in the Bulgarian Property market.
Driving the pricing upside is the new construction segment which recorded the largest hike in 7 years.
Residential districts like Manastirski Livadi, Malinova Dolina, Studentski Grad and Vitosha, where over 70% of the supply is new construction, are the focal point of the trend. Asking prices in these neighborhoods have leaped up from 800 euro/sq m at the beginning of the year to 1,200 euro/sq m.
The explanation for the price gains in Vidin has to do with the launched construction of a new cross-Danube bridge and the big number of residents of area villages that have sold land to the developers of logistics and business parks and now invest in urban homes.