DW: Housing Prices in Bulgaria are Inexplicably High

Novinite Insider » OPINIONS | November 27, 2017, Monday // 16:10
Bulgaria: DW: Housing Prices in Bulgaria are Inexplicably High Archive

Bulgaria is among the European countries with a highly overestimated real estate market. Over the last two years, house prices in the country have been rising at the highest rates in the European Union, warns the European Commission, which considers this fact worrying against the backdrop of the high indebtedness of Bulgarian households and businesses. The continuing overcrowding of Sofia, Varna and Plovdiv is one of the reasons for the big imbalance in the property market offered for sale or rental in the largest cities. A study by the World Bank has linked the housing crisis and the growing income gaps among the various social and ethnic groups in the country. According to official statistics, there are 3.9 million available homes in Bulgaria - this figure should be enough for the needs of the three million Bulgarian households. However, World Bank experts note the following: "1.2 million of homes in Bulgaria are uninhabited, meaning that in reality, 3 million Bulgarian households live in 2.7 million homes, often 6-8 people from three generations share a single apartment, while a quarter of the homes in Sofia and nearly half of the houses in rural areas remain uninhabited. "

The Program Director at Sofia Open Society Institute, Boyan Zahariev, is categorical that for young families in the country finding a home is very difficult because of low incomes - and that this is one of the factors for intensive emigration. The young Bulgarians, together with the young Italians, hold the European record of the longest cohabitation with the parents under one roof - on average 34 years old. According to the World Bank report, overcrowded housing is home to 80% of children under 18 and 60% of young people aged 16-29. Overcrowded dwellings also occupy 82% of tenants who pay a market rent. The percentage of overcrowded dwellings in Bulgaria is very high compared to the average indicators for the European Union, the Bank's experts said.

Many people can not afford their own home.

Average house prices are between 550 and 800 euros per sq m for less attractive homes in old buildings and up to 800-1200 euro per sq m for homes in newly built buildings with lower house prices, an attractive location, noted the World Bank. However, the average monthly household income is 477 euros, which means that most of the population is unable to buy or even rent a home at market rates.

By relative share of housing maintenance costs, Bulgaria ranks second among the countries of the former Eastern bloc. In this respect, there is a huge difference between the different regions of the country, the World Bank report said. "In cities like Sofia, where productivity is higher and the possibilities are higher, housing costs are very high compared to income, elsewhere the cost is low, but the dwellings are empty," says one of the findings. Boyan Zahariev adds that these expenditures exceed 15% of the budget of the Bulgarian households, which is one of the reasons for the low standard of living of the Bulgarians. Their housing problems are also rooted in the poor condition of the housing stock, built during the time of the Communist regime in Bulgaria, consisting mainly of panel complexes aged 30 and over. They are also over three-quarters of the apartments in the country. Lack of maintenance and technical inspections often pose a threat to the lives and health of the occupants of more than 30% of the country's homes.

The rental market in Bulgaria covers only 5% of the country's living space, the World Bank report said. "The lack of an efficient rental market hampers job mobility and raises problems around finding a decent home." The rental shortage is a major deterrent to labor mobility, especially among young families, and artificially increases rental rates for the available housing stock, World Bank experts said. According to them, one of the reasons for the lack of progress in this respect is the shortcomings of the justice system, which does not guarantee the execution of the contracts - both by the landlords and by the tenants. What can be done? In order to reduce housing overcrowding in Bulgaria and stimulate the rental market, the Bank's experts advise the Bulgarian government to fully review its housing policy in order to improve the chances of solving one of the worst problems facing the melting young generations in the country. They propose to exempt the owners' income from renting up to five apartments for rent, as well as ensuring a fast and inexpensive procedure for resolving disputes between tenants and landlords.

The state urgently needs to increase its support for the development of extremely overcrowded and unhygienic Roma ghettos, which have long become permanent centers of social and ethnic tensions. According to Boyan Zahariev, the sale of social housing, which is already under 2% of the housing stock in the country, is extremely improper. Zahariev supports the World Bank's proposal for socially disadvantaged people - homeless, retired, Roma, young people and large families - to get the so-called residential vouchers to allow them to go out on the open market. This widespread policy in the West allows the needy to have a secure state support in paying up to 70% of the cost of rent and overheads. This will encourage more homeowners to rent their unnecessary living space, the researcher of the Open Society is convinced.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!

Opinions » Be a reporter: Write and send your article
Tags: housing, prices, Bulgaria, high
Expats.bg All Are Welcome! Join Now!
Bulgaria news Novinite.com (Sofia News Agency - www.sofianewsagency.com) is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." Novinite.com (Sofia News Agency - www.sofianewsagency.com) and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria