The Luxury Property Market in Bulgaria
The luxury property market in Bulgaria is moderately high during the first quarter of 2018, according to an analysis by the consulting firm Unique Estates.
Activity during the first three months was mainly in the lower price segment - up to 300-350,000 euros. Transactions were made mainly in the central regions of Sofia and around Doctor's Memorial, with much of the demand for investment.
The main demand in these areas is for apartments in old aristocratic buildings. Buyers are mainly people with free capital who are interested in homes which they can renovate, and resell them at a later price.
"In recent years, this type of purchase has gained popularity among people looking for a lucrative investment. Recently, however, this kind of offers are rarer and this limits the potential for deals, "commented Galina Grodova, senior partner at Unique Estates.
The other type of apartment search in the central part of Sofia is again with investment purpose. In recent years people give these apartments mainly for renting in Airbnb-type platforms. There are also no purchases for residential use.
Relatively active are the transactions in the lower segment of the luxury market. In the first quarter these were the southern regions of Sofia, around Bulgaria Blvd., as well as the neighborhoods of the Vitosha collar. And there, sales were mainly flats to cover housing needs.
In the middle price segment of the luxury market - 500-800,000 euros, transactions in the first quarter were significantly less. The reason is the poor supply of houses and apartments that meet the demand of buyers.
According to real estate agents, the requirements for apartments in this price segment are high. People want to have a large square - at least 200 square meters, at least three bedrooms with a bathroom to each of them, wardrobes, at least two parking lots and a nice view. For most houses, the requirement is also for modern architecture, a large yard and "smart" property management.
Unlike the apartments, however, houses in this price class are expected to have a more balanced market with the release of several projects for closed complexes in the coming months. They will offer both flats and detached houses in the neighborhoods of the so-called. Vitosha collar - Boyana, Dragalevtsi, Simeonovo and Kambanite locality.
The interest in the purchase of exclusive houses and residences, whose prices usually exceed 1-1.5 million euros, also remains high. After several strong deals in this segment last year, however, supply is currently limited.
The total activity of the luxury property market in the first quarter remained at last year's level (both in sales and in rents). Unique Estates' forecast is that the sales volume will maintain almost the same due to the shortage of both suitable under construction projects and plots with a good location for future construction.
The year began with an ongoing rise in property prices in central Sofia regions, which are already sold on average at 2300 euros / sq. m, in the region of Doctor's Memorial - about 2700 euro / sq. m.
In contrast, the increased supply of rental properties has led to a drop in prices over the last year. Then there was a growing interest, especially in apartments in the center of Sofia, because of the EU Presidency. Many homes have been rented in advance, and this has led to high activity in the market, which continued until the autumn of 2017. In recent months, however, the demand has fallen to its usual levels. At the same time, the peak of investment purchases led to a further oversupply of the rental market, so prices in many areas went down.
The forecast of Unique Estates for 2018 is the limited supply to slightly raise sales prices in the luxury property market, while rents will remain at current levels or will fall.
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