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The prices for residential properties in Bulgaria have increased by an average of 200% in the last decade, according to analysis of real estate agency "Bulgarian Properties", based on data from the National Statistics Institute (NSI) and the Registry Agency.
"We witnessed one very dynamic decade for the real estate market in Bulgaria, which brought drastic increase of prices and volumes of deals. There was also a boom in the construction activity, followed by a sharp drop in the last two years," said Polina Stoykova, Operational Director of "Bulgarian Properties".
She has explained that the company's analysis includes the last 10 years because "the new century set the beginning of the contemporary real estate market in Bulgaria".
The data shows that in the period between 2000 and the middle of Q3 in 2008, the price of residential properties in the regional cities have continually gone up. After that period until the end of 2010, the company has registered a constant drop of prices.
The average growth of residential properties prices for the last 10 years is 201%. The cities of Silistra, Targovishte and Kardzhali saw the biggest increase by 330%, 310% and 309%, respectively.
However, these cities had a lower price basis in 2000 and they compensated with a bigger increase, in order to catch up with the prices in other cities in the country.
In Sofia the average growth of prices for the last 10 years was 171%, while in the Black Sea city of Varna it was 237%.
Since the peak of the residential property prices in Q3 of 2008 until the last quarter of 2010, the drop was an average of 33%.
In Sofia it was 36.6%, which means that the prices for apartments in the capital have gone back a little below their level from 2005.
According to the analysis, the first two years of the decade started with a zero increase of prices. The first two-digit growth on an annual basis was first registered in 2003 and it reaches its highest value in 2004 – 47%.
In 2005 the increase continues to be significant, but it slows down to 14.7% in the following year. In 2007 and 2008, there was an increase of 28% and 24%, respectively. The next two years register continuous drops – 22% in 2009 and 10% in 2010.
The volume of signed deals for residential properties have also registered a significant drop of 45% in 2010, compared to 2007, according to data from the Bulgarian Registry Agency.
In 2008, the drop is 5%, compares to the previous year, while in 2009 in was 37% and in 2010 it was 7%.
"The data shows that volumes of signed deals react first to the market tendencies, and then they are followed by the prices," Stoykova said.
She said she expected the number of deals to increase in 2011, which would be the first sign that the sector is leaving the recession behind.
Construction permits are another thing that registered a decrease in 2010 by 56%, compared to their peak in 2007, according to the data from the National Statistics Institute (NSI).
Last year, the issued permits for construction of residential buildings were 4891, which is about 24% less than those issued in 2009. This number is almost twice smaller, compared to 2005.
The NSI data showed that the residential properties in Bulgaria have increased by 2.26% in the period 2004-2009. The properties in the cities went up by 3.94%, while the ones in villages decreased by 0.56%.
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