The fact that the force with which the Bulgarian residential property market has been developing is beginning to subside was officially confirmed by real estate company executives during a press conference on September 1.
In 2008, the market entered a stage of clear segmentation and only the interest towards higher-class exclusive property has marked a significant increase. Looking at the bigger picture, the panel of participants was unanimous that an average Bulgarian family with a monthly income of 1500 leva was perfectly capable of purchasing a home priced 750 to 800 euro a sq m, given all the financing possibilities offered by local banks.
The market reaching a point of saturation, however, does not come as news, after numerous analyses advertised by the property agencies themselves flooded the media over the past several months. All the research pointed to the single emerging tendency of unreasonably large supply with suspicious quality versus decreased demand and more cautious clients.
Many Bulgarians were close to have their dream come true of owning a vacation home on the Black Sea or at a ski resort as prices were dropping to 500 euro a sq m, Mihail Chobanov, managing director of Bulgarian Properties agency, said. According to him, the only steady price increase had been one noticeable in the segment of luxury residential property, which was in higher demand.
Teodora Dimitrova, a managing partner from the real estate agency ERA Bulgaria, said that the future of the property market would depend on three main factors: how average incomes were progressing, the change of lifestyle and more clients wishing to buy a home in a modern building, as well as the deeply rooted trend in Bulgarian mentality that dictates that it is better to buy than to rent.
This tendency was especially true for Bulgaria, because buying a property was considered to be the most solid investment, Iliyan Nikolov from RE/MAX Bulgaria said. He also said that a family with a monthly income of 1500 leva could afford to buy a property priced at 550-600 euro a sq m, and according to him, the mortgage payment would not exceed 300 euro a month.
That said, Nikolov alluded to the ever-growing propensity of people streaming to the five largest Bulgarian cities Sofia, Varna, Plovdiv, Bourgas and Rousse, where property prices remain high.
Then, it was not clear how a family would ever break through the vicious circle of buying a property at the aforementioned price, which was valid for smaller provincial towns, where, on the other hand, joint salaries could seldom reach the sum of 1500 leva.
All participants at the news conference assured that financing of property purchase had become easier than ever, with banks offering preferential loans and tolerable interest rates.
