What is the Future of Real Estate in Sofia?
Usually we understand if there is a bubble in a market it is just before it bursts, and before that we make very clever conclusions. My very clever conclusion is that we still do not have a real estate bubble, or at least it is not so inflated that we can expect it won't burst soon. This is what Georgi Pavlov, executive director of Address Real Estate, told Bloomberg TV Bulgaria.
"My reasons for this opinion are that prices have not yet reached the peak of 2008, and at the same time, the income of the population for these 10 years has risen, so even if there is a bubble, we are at a much earlier stage, or we are much better prepared for it ".
One of the measures used to estimate the growth in a given sector has a real base or it is a bubble, is the current return on assets and their current price, the guest said. "With residential properties, this is the rental price of the property, it has not yet reached its dangerous levels."
"In Bulgaria traditionally the yield on housing estates is about 6% and in the previous bubble it has dropped to 3%, which clearly indicates that the market is overestimated, yet this factor does not indicate the existence of a forming bubble. The increase in incomes has led to a rise in rents that people are willing to pay, which I think is currently between 4 and 5%. "
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