Bulgarias Residential Property Market Is Nearing Its Peak Realtors

For the months of May and June, supply on the residential property market surpassed the demand by 50 per cent, Katya Tsenova, the executive director of Address real estate agency, told a news conference on July 21.In an attempt to evaluate the current status of the market, there were a number of contradictory statistics made public by various agencies in the past several weeks, Tsenova said.As being one of the leading consultants and somewhat of a price negotiator, Address determined that Bulgaria's residential property market is falling into a state of self-correction. Tsenova explained the tendency as a situation when potential buyers become more particular in their wishes and refuse to pay the proposed high prices. This compels sellers to correct the demanded prices and lower them enough to make them more appealing, the executive director said.Rising inflation and the higher interest rates charged by banks since the end of 2007 have contributed to the property price hike, Tsenova said. According to Address real estate, for the first six months of the year, the average increase of residential property in the bigger cities comes to 17 per cent.A record high price jump has been observed in Rousse, Plovdiv and Veliko Turnovo, almost by 27 per cent in all three cities. Sofia comes fourth with an increase by 21 per cent. The lowest increase has been determined in Sliven and Sandanski, by four per cent, and Stara Zagora by six per cent.Tsenova explained that the residential market in Rousse is booming as a result of the city's economic growth, and the interest displayed by buyers from neighbouring Romania.The average price a square metre in Sofia is 1094 euro, in Varna it is 1031, while the cheapest property in a relatively big town such as Yambol is 402 euro a square metre, the agency said. The accumulative data has been drawn upon actual deals made between January and June 2008, Tsenova said.Tsenova said that the need for price corrections is evident in some of Sofia's boroughs such as Mladost, where prices have gone up by 25 per cent for the first six months, Studentski Grad (up by 23 per cent) and Lyulin (up by 21 per cent). In those areas the supply is somewhat relevant to the demand, but buyers are not so impulsive in their decisions, they take the time to do several inspections of the property and are more cautious in their selection, Tsenova said. Asked whether the recently-imposed construction prohibition in Sofia's borough of Mladost, which will be in effect for six months, will affect property prices in the area, Tsenova said that Mladost was a quite desirable location. Six months would not be enough to measure significant repercussion on the property prices, she said.She said that two factors showed that Bulgaria's residential property market was near its peak moment. One was the decrease of the number of flats bought solely for their investment value and the the second factor was the increase of newly-built completed flats put up for sale. Yet another tendency was beginning to take shape, Tsenova said. The majority of buyers are looking to buy residential property, which would serve their family needs rather to buy for future profitability."Let us not forget that investing in real estate still remains the best investment. Property that could not find a buyer is virtually non-existent," Tsenova said.