Pandemic Increased Demand for Larger Apartments in Bulgaria
The Corona crisis has intensified the demand for larger homes and houses with courtyards in Bulgaria. In the last quarter of 2020 the purchased two-room apartments in Sofia are more than one-room, and the four-room dwellings have a share of 11%. By comparison, in 2019, 60 percent of the homes purchased were two-room and 37 percent were three-room, while the four-room were barely present in buyer demand, show the data of Bulgarian Properties reported by the CEO of the company Polina Stoykova during an online conference organized by the Chamber of Professional Assessors.
"On the realty market there is demand for apartments that were not typical until now – with three bedrooms, because of the need for an extra room as a result of working from home, caused by the pandemic, and more living area", said Stoykova.
According to Bogomil Nikolov, an investor in the GORA project, demand for larger living area has been a trend on the market in Bulgaria over the past few years, and coronavirus has only accelerated the processes.
Inquiries about ground-floor apartments in “gated” residential complexes in the city or nearby areas have increased, while in previous years ground and top-floor properties have been excluded by average buyers. In 2020, the number of transactions with ground-floor apartments has increased by 20% on an annual basis, according to Yavlena realty company data announced by the company's CEO Isabella Klissarska, reports Investor.bg.
Last year, country houses became a hit, with buyers opting for properties with less need for renovation and ready for for moving in. In the last seven months of 2020 Yavlena reported 3,000 inquiries about country houses, compared to the end of 2019 the increase is five times.
According to Bulgarian Properties, interest in country houses in 2020 has upped by 20%, and their average price has reached EUR 36,640. "Houses that have been renovated or are new are in high demand, and people are setting aside a larger budget for the purchase of such properties of an average of EUR 30 – 40,000", pointed out Stoykova.
Demand for construction plots with direct access to a road and functioning infrastructure has also been stepped up, allowing projects to be activated as soon as possible, Klissarska added.
The rental market has suffered more severely from the coronavirus crisis than the purchase and sales, with rents of one-room apartments falling by 7% in the second half of 2020 and those of two- and three-room dwellings falling by 6% and 12% respectively, according to Yavlena.
Tenants have shifted demand from larger to smaller homes or completely vacated their apartments, as many people working in big cities have returned to their home towns thanks to the opportunity to work from home, and this has led to supply growth, she added. Klissarska, however, believes rents reached their bottom last year and this year the decline will be halted.
In early 2021, demand for housing is growing, with more deals concluded compared to the beginning of 2020, Stoykova reported. "Last year did not perform up to expectations for a price drop, they marked growth between 2% and 5% in major cities. Transactions have declined, but this is mainly due to spring lockdowns, when the decline was 20%, and in the remaining months the market is catching up," she said.
According to Klissarska, the correctly determined price is essential for the quick sale of the residential property. 'When started from an adequate market price, the transferal periods may be within a few days and there may be no discounts on the offer price or they may be less than 1 %. Where we have unrealistic expectations of sellers, the price of the offer on the market increases and discounts may exceed 10%," she added.
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