Latest News From The Bulgarian Properties Market

The area of residential developments approved for construction in January-September was up 55% over the year-ago period, Bulgaria's National Statistical Institute (NSI) said on Tuesday, November 22.

The biggest year-on-year surge in building permits was recorded in the first quarter of 2005 when their number doubled. The year-on-year growth rate then fell to 66% in Q2 and to 29% in Q3, shows NSI data.

The area of residential developments approved for construction in January-September was up 55% over the year-ago period, Bulgaria's National Statistical Institute (NSI) said on Tuesday, November 22.

The biggest year-on-year surge in building permits was recorded in the first quarter of 2005 when their number doubled. The year-on-year growth rate then fell to 66% in Q2 and to 29% in Q3, shows NSI data.

The area of the average apartment approved for construction has shrunk from 151 sq m in January-September 2004 to 139 sq m in the first mine months of 2005. At the same time, the average residential building is designed to accommodate 4 apartments in 2005, up from 3.5 a year earlier. The NSI said the quoted data does not include vacation villages approved for construction in the country's seaside and mountain resorts.

The coastal Bourgas region is at the center of the nation's housing boom with approved residential developments with combined area of 700,000 sq m. It is followed by Sofia with 630,000 sq m and Varna, also on the Black Sea, with 454,000 sq m.

The Bourgas region also leads the vacation villages/hotels category with 370,000 sq m of approved developments. It is followed by the Varna region with 250,000 sq m and Sofia and the greater Sofia area with a combined 103,000 sq m.

The domestic realtors do not expect an oversupply of housing properties any time soon. They said the rampant construction in the Varna and Bourgas regions is primarily due to the shear number of holiday complexes under development.

Despite the scope of construction, there will be no downward price correction, said Dobromir Ganev, chairman of the Varna Real Estates Association (VREA). Property prices have been flattish year-on-year only in areas with infrastructure undercapacity and around the Zlatni Pyasatsi resort, said Ganev. At the same time, developers are finding excellent opportunities south of Sozopol and in the areas of Byala, Obzor and Shabla, he said.

The construction of 2 golf courses between Balchik and Kavarna is also expected to attract property developers to this coastal area.

Around 70% of the permits granted for the Varna area are for the construction of residential buildings, shows VREA data. Over 1.4 mln sq m of properties are currently under construction along the coastline with another 600,000-700,000 sq m on the drawing board or in various stages of pre-development.

The Northern Black Sea coast currently commands the highest prices for new residential construction, starting at 500 euro/sq m and topping out at around 1,500 euro/sq m. The value of these properties is expected to keep a step ahead of the headline inflation and grow by 5-10% annually.

VREA reports increased demand for apartments in low-rise urbanised gated communities and hotel suites in gated upscale holiday complexes which are acquired not as a second home but as an investment.