Analysts expect that 2012 will be again the year of the buyers. Most buyers will be first-timers. The hope is that those who have savings or free money will be bold enough to spend them on properties because of the attractive prices.

The property prices in Bulgaria will continue to fall in 2012, however the analysts do not dare to give forecasts about the amount to which the prices will drop. The expectations are that the buyers and the tenants will dictate the property prices. Most of the buyers of holiday apartments and houses will be Russian, while the buyers of all other types of property will be mostly Bulgarians.  The expectations are that in 2012 cheap properties not exceeding 55 000 Euros will be in demand.  Although the number of the property sales in 2011 has increased by 30% in comparison with 2010 unlike a year ago, now the buyers are spending mostly on cheap properties.

Concerning the survival of the construction companies, the European money will be of prime importance for many of them.  In just one year the income of the construction industry has shrunk from 11.7 billion levs to 9.9 billion levs in 2011. Big companies will focus on the construction of apartment buildings and private investors will commission them for the construction of individual buildings. The construction of big shopping centres will continue.

The money from the European programmes will be spent for the reconstruction of hospitals, schools and cultural monuments.  The greatest amount of the European money will go for the development of infrastructure.  Some of these projects have to be completed in 2012.

In 2011 the market of agricultural land in Bulgaria went back to the levels before the recession. 1 200 000 dka of land have been sold and only in July 124 000 sales took place. In 2008, which was the best year before the recession, in 122 000 deals were sold 1 240 000 dka of land.

The average price of the land is 345 levs (170 Euros) per dka, for comparison in 2010 it was 320 levs (160 Euros), while in 2008 – 350 levs (175 Euros).

According to analysts, agricultural land proved to be a stable asset in Bulgaria and this has attracted investors.

According to the property analysts 40% of the property buyers in Bulgaria are prepared to pay between 50 and 80 000 Euros for their purchase. They are the largest group of property buyers in the country. In the second place (23%) are the buyers ready to pay between 80 000 and 120 000 Euros and in the third place (again 23%) are those under the 50 000 Euros margin.
According to the official statistics 40% of the sales have been of properties that cost from 30 000 to 50 000 Euros, followed by a group of properties (24%) that cost between 50 000 and 80 000 Euros. Although apartments under 30 000 Euros are the least in demand, the actual sales of such properties are 14% of the total number of the sales. The sales of apartments with prices exceeding 120 000 Euros are 7% of the actual sales which is equal to the number of enquiries for properties within this price margin.
Concerning rent, almost 60% of all enquiries were for apartments that rent for less than 250 Euros per month, of them 40% fall in the 150-250 Euro margin. However, the highest number of rental contracts (66%) is signed for properties that rent between 250 and 500 Euros per month. In the second place (17%) are those that rent for more than 500 Euros per month and in the third place (17% again) are properties renting for less than 250 Euros per month.

The internet statistics of Yandex, the Russian equivalent of Google, show that the Russians used the phrase “property in Bulgaria” in their online searches and Bulgaria was topping the list of their searches of properties abroad.  This is not surprising as the Russians have bought more than 200 000 properties in Bulgaria in the last four years.

The prices of apartments in Sofia have decreased by 1/3 since 2008 due to the recession. If four years ago a one-bedroom apartment in the Bulgarian capital could sell for 78 302 Euros on average, at the moment it sells for 54 073 Euros. Only in the last year the prices have dropped by 9,78% .

However, according to the Land Registry, the total number of the sales in the first half of 2011 was only 102 276, in comparison to 73 867 sales in the same period of the last year. This is an increase of 27,78%. Most of the sales, about 25%, have taken place in the biggest Bulgarian cities: Sofia, Plovdiv, Varna, Burgas and Stara Zagora.

The price drop of the properties in Bulgaria stimulated many people to buy properties with the aim to rent them as the price drop of the properties for sale is larger than the drop of the rents. Buying to invest has become a permanent tendency according to analysts.  A property purchased for 28 000 Euros can be rented for 150 Euros per month, i.e. and the annual yield is 6.5%. For the same period last year the yield was 4.5 %.

At the same time rental contracts have become shorter and now landlords are prepared to sign rental contracts for three months instead of for one year.

Purchases are only being made for properties with attractive prices and in affluent areas with good infrastructure. Many Bulgarians have sold the properties which they inherited or properties in a bad condition, so that they can invest in better quality new apartments with good location.

The forecasts for a slow down on the property market in Bulgaria came true – it is back to the levels of 2004. The number of deals with real estate have dropped by 35% in 2009 and stopped at 200 678. This drop was deeper than the one in 1997 – 1998 when the country experienced hyperinflation and bank crisis.

According to the Land Registry the hysterical purchases of apartments in the big cities has died away and the drop in the number of purchases  in Sofia, Varna, Plovdiv and Pleven has dropped lower than the average for the country. In the capital Sofia this number has dropped below the lever of 2004 when the purchases were 28 837.

The market in the Black Sea resorts and in the agricultural areas of the country is fairing better than in the rest of the country during the recession. In Nessebar on the Black Sea there were 6461 deals in 2009 which is only by 23% lower than in 2008. In Dobrich the drop is even lower. The interest in agricultural land in the area has remained the same.

In the last quarter of 2009 the first signs of activity have appeared on the rental market of office space in Bulgaria. Analysts claim that this was due to the efforts of the owners to stimulate prospective tenants with bonuses like rent free periods and payment of the relocation. The much lower rents of newly built offices proved to be a good incentive for many companies to relocate.

The expectation in 2010 are that the size of the unoccupied office spaces will continue to grow due to the large number of new offices that are expected to be offered on the market. In the last quarter of 2009 new offices with total area of 38 200 sq m entered the market. In 2008 their total area was 65 900 sq m. The largest projects have been planned to be completed in 2010 and thus the expectations are that by the end of the current year the newly finished office space will total 360 000 sq m.

In the end of 2009 the office space in Sofia exceeded 1 million sq m of which 80% were situated on the main boulevards and in the outskirts of the city. The completion of about 460 000 sq m of office space has been delayed or frozen.

The rent was 13.50 EUR/sq m for offices class A in the last months of 2009. The average rent for the same period of 2008 was 17 EUR/sq m. The offices of class B and C are offered at 8 and 4 EUR/sq m respectively. It is expected that these levels will remain the same in 2010.

The yield from first class office space in Sofia stays at 11%.

In 2009 the Russians have spent 11.3 billion USD to buy second homes abroad, according to the review of the department for properties abroad of the Russian estate agency DOKI. Properties in Bulgaria are the most popular among Russians and 21% of the clients of the agency have been interested in buying second homes in Bulgaria for the average price of 42 000 Euros. In second place are properties in Spain, where 17% of the clients of DOKI are prepared to pay on average 178 000 Euros. In third place are properties in Turkey at an average price of 50 000 Euros which attracted the interest of 12% of the clients of the Russian agency, closely followed by properties in the USA and Israel.

Another Russian estate agency MIEL – Distant Property Management revealed similar statistics. Again properties in Bulgaria are the most popular ones among Russians, followed by properties in Turkey, Spain and the Ukraine. This estate agency has divided their clients into three groups. The first one consists of young people under the age of 35 who buy studios and one-bedroom apartments in the price range 25 -70 000 Euros. They prefer Bulgaria in first place, followed by Egypt and The Czech Republic.

The second group are married couples at the age of 35 – 45. The look for one- or two-bedroom apartments for the price of 70-80 000 Euros in Monte Negro, Bulgaria, Spain, Germany, Italy and Turkey.

The third group consist of wealthy people above 45 who spend at least 250 000 Euros. They do not have specific preferences about the location of their property.

Almost 28% is the decrease in the number of deals on the property market in Bulgaria annually. This number is different in the different parts of the country but only Sofia and Varna have similar statistics. 72% of those who would like to buy a property in Sofia and Varna are prepared to pay not more than 40 000 Euros. In Plovdiv and Bourgas the buyers are prepared to pay not more than 25 000 Euros.

In 2009, 42% of the buyers paid in cash and 37% of the sellers had financial difficulties, not necessary inability to pay their mortgages or bad credits. In 2009 most of the buyers bought newly built properties and only 12 % of them have bought prefabricated apartments. The most active buyers were between 26 and 35 years of age.

Prices of properties in Sofia and in Plovdiv have dropped by approximately 17% in the third quarter of 2009 in comparison with the same period of 2008. The average real purchase prices of apartments in Sofia are similar to the ones at the end of 2007 and in the beginning of 2008. The prices of properties in the Bulgarian capital have reached their climax in the third quarter of 2008.

The situation is similar concerning office space. In the third quarter of this year the index of the average prices of offices, warehouses and shops has dropped by 26 on an annual basis. The market price of office space has reached its peak in the last quarter of 2008.

In Plovdiv the average property prices are close to the those at the end of 2007 and the beginning of 2008. Their peak similarly to Sofia was again in the third quarter of 2008.

In the last months the highest price of a property purchase in Sofia was 3000 Euros per sq m. This is half of the top prices paid for luxury properties two years ago.  The owners of expensive properties sell them now for two reasons – some experience financial difficulties, others think that with the money from the sale they will make a better investment.  According to the statistics the owners with financial difficulties are only 17% of the sellers and all of them are keen on dropping the price of their property.

Buyers ready to spend about 500 000 Euros are rare and they have a very good choice at the moment. The advertised prices of luxury properties are up to 200 000 Euros for apartments and about 600 000 Euros for houses in the affluent areas of Sofia. The actual purchases are carried out at much lower prices.  Buyers are prepared to pay between 120 000 and 150 000 Euros for a luxury apartment and about 500 000 Euros for a house. At the moment properties offered at prices exceeding 1 million Euros can not be sold as prospective buyers very rarely view them.

Only 12% of the buyers of luxury properties actually buy with the intention to make this property their home. 53% of them think that this is the right time to make a long term profitable investment. The rest have different reasons for buying like increasing the number of children in the family or achieving higher social standing.

According to estate agents the recession on the market of luxury properties came with a delay of about three months, possibly due to the optimism of the people with money. Then it crushed. The property market’s stability of the last months is less likely to cause price increase. This is not good news of owners of luxury properties as they expect to sell within a time limit. The reason for this is that more than 90% of the luxury properties are sold furnished and the furnishing loses its value in time thus affecting the price of the property.

The location of the property continues to be a key factor in the choice of property. The most popular affluent parts of Sofia are still the Doctors’ Garden, Lozenets, the luxury enclaves along Bulgaria Boulevard and the outskirts of Sofia in the south, right in the foot of Vitosha Mountain.

Analysts believe that once the recession is over, the luxury properties will increase in price faster than the other types of property.

The prices of the apartments in affluent areas of Sofia have dropped by 20 %. The most serious price drop is in the area of the Doctor’s Garden – by 33% and now the price is 1500 Euros per metre. This is due to the fact that the properties offered at unrealistic prices have disappeared from the market. The rental prices in this area favoured by foreigners in Bulgaria also have dropped by 18% to 6 euros per square metre, which is the first drop of rental prices registered in the capital. The expectations are that there will be further price drops in the beginning of 2010; after that the market will start to recover.

The situation in the rentals of office space is similar. Prices have dropped to the levels of 2006  – 12 euros per square metre. The empty office spaces in the central parts of the capital were 13.4% in June 2009 while in the outskirts this figure has reached 19.6%.

By Kevin Rose, The Independent

As property prices fall across Europe, the chance of owning a holiday home abroad may never be better. And with sterling struggling against foreign currencies – touching a six-month low against the Euro on Thursday – it may be wise to get moving sooner rather than later. But where are the bargains?

Latest figures suggest that old favourites France and Spain are regaining their popularity with buyers of holiday homes. But the picture is not so positive for investors wanting a sizeable return on their purchases, with some former European hotspots now looking decidedly chilly.

According to overseas mortgage firm Conti, 31 per cent of the enquiries it has received so far this year have been about property in France, while more than a fifth were about Spain. Clare Nessling, director at Conti, says buyers are sticking to areas they know and trust, and turning their backs on more adventurous territories such as Bulgaria, Turkey and Dubai.

Spain is maintaining its popularity with UK holiday home buyers as prices have fallen heavily due to an oversupply of properties on the market. In some cases, prices in the Costa del Sol have plummeted by 40 per cent since the peak in 2006/7.

That means for those who have always dreamed of buying a place in the sun but been put off by the cost, now is the time to take a look.

The glut of properties on the Spanish market has led one UK firm to launch a service specifically to try and find buyers for “distressed” properties, typically repossessions, probate or part-exchanged properties.

The online property company, whitehotproperty.co.uk, is currently marketing around 4,000 distressed properties in the popular tourist destinations with – in some cases – sizeable discounts. In one example, a four-bed, two-bathroom duplex apartment in Torrevieja has been reduced to €118.400 (£102,068), a 27 per cent discount on the original asking price.

Similarly, a three-bedroom villa with a pool in a tourist hotspot such as the Costas can be bought for €400,000. It would have cost around €650,000 at the height of the market three years ago.

Stuart Law, chief executive of international property investment firm Assetz, puts the British homebuyers’ continued interest in Spain down to its proximity to the UK, its sunny climate and an abundance of sandy beaches.

The addition of relatively low property prices means Brits are in a good position to buy in Spain – so long as they don’t expect investor-grade price rises. With supply outstripping demand, the situation is unattractive to the professional property developer reliant on solid returns over a relatively short period.

Law says: “Spain is a very difficult place to be buying from an investment point of view, particularly if you are keen on covering all of your costs with rent. Oversupply is impacting the rental market and the exchange rate isn’t helping.

“If someone has set their mind on a holiday home that they are not going to rent out then Spain is ideal, and the very problem that would cause an issue to an investor is what is helping push prices down. There is massive choice, and also some very good pricing.”

However, although Spain may have plenty of appeal, the European continental property market as a whole has not yet recovered. The Netherlands, Denmark, Slovenia and Slovakia have all seen double-digit house price falls over the second quarter of the year.

But the leading horror story is Bulgaria. The former hotspot in the Balkans is now a no-go area for lenders and buyers alike, with its land registry data showing that real estate transactions crashed by 35 per cent year-on-year in the first half of 2009.

Land prices in the previously fashionable Black Sea area fell by an average of 40 per cent in the first eight months of 2009 compared to the same period in 2008, according to the International Real Estate Federation in Bulgaria. All of Bulgaria’s major cities and seaside resorts, including Sofia, Varna and Samokov, as well as winter resort Borovets, reported falls in the region of 50 per cent over the same period.

Stuart Law cautions Brits to avoid Bulgaria at all costs. He says: “It’s just horrific; where is the bottom of the market? Our question has always been ‘why would you bother?’ There are so many better places, either closer, nicer or just as cheap. Comparing Spain to Bulgaria… there really isn’t any choice. Spain ticks almost every box and is much closer and easier?”

He suggests that if potential holiday homebuyers want to go further afield, they should consider the US, where some bargains can be found. “Anybody who has ever aspired to own a holiday home in Florida and hasn’t looked recently is going to be genuinely shocked by what they could get. We’ve seen Orlando townhouses in prime resorts at €50,000-€70,000.”

One reason that many are avoiding Europe at the moment is the state of the pound. Over the past two years there has been unprecedented volatility in the currency markets, with the value of sterling fluctuating by over 30 per cent against the euro. The pound currently buys around €1.1, with many currency analysts predicting that parity will occur very soon.

Stephen Hughes, a director of Foreign Currency Direct, fears that sterling is “collapsing”. He argues that currency traders are agreeing on one thing: “sterling is likely to fall fast and far.”

With further falls probable, what should existing or potential European homebuyers do to protect themselves? Mark Bodega, a director at currency broker HiFX, recommends that people looking to buy abroad should consider a “forward contact”. “This allows you to buy currency now and pay for it later,” he explains. “You will need to pay a 10 per cent deposit now and the 90 per cent balance upon the maturity of the contract, but it allows clients to lock into an exchange rate for up to a year.”

Julian Cunningham, from international estate agents Knight Frank, advises British sellers on the continent to reduce their asking prices. He says: “The savvy vendor is passing on any currency gain to the potential buyer in the form of a reduced asking price. But without passing on a certain percentage of that gain to the potential purchaser, it makes it a lot more difficult to do the deal.”

Holiday home heaven: Why France remains number one

It’s not difficult to see why France remains the most popular choice for Brits. Easily accessible by road, rail and air, potential buyers are not solely at the mercy of budget airlines. House prices have remained resilient in France compared to the UK, and mortgage funding is largely more attractive, too.

Nessling says: “In France, lenders have always been a little more cautious. They certainly haven’t taken the extreme view that most UK lenders did. Throughout the credit crunch we’ve still been able to get 100 per cent mortgages in France for loans over €250,000.”

More than four-fifths of mortgages in France are fixed and the majority of all new mortgages are fixed for at least one year. This lending strategy is another reason why the French property market is, on the whole, performing better than in Britain.

Despite a period of house-price falls in the country last year, prices in France actually increased by 3.9 per cent in the second quarter of this year, according to the French National Association of Real Estate Agents.

Stuart Law, chief executive of international property investment firm Assetz, agrees that mortgage lenders in France have kept their criteria largely unchanged, arguing that because they lend based on affordability, an unsustainable boom in prices in France has been prevented. He says: “In the South of France prices have barely wobbled as banks do not think they have substantial risk there.”

In the next four to five months the property price drop in Bulgaria will be much of smaller scale, according to analysts. After that the property market will hit the bottom.

According to the statistics, the property prices in Sofia drop slower in the last months. In February the price drop was of 6.88 % while in August it was 3.84%. The slowing down of the recession can be also seen in the rents . In May the rents in Sofia were by 2.8% lower than in April, while in June they were by 1.9% lower than in May and in July by 1,6% lower than in May.  In the end of August the  price drop was only by 0.6 in comparison with July.

The same tendency can be observed in the other major Bulgarian towns.

The developers in Bulgaria still find it very hard to sell. Those at the Black Sea coast claim that they mainly rely on buyers from Russia who look for finished apartments, positioned right on the sea coast, close to the beaches.

The prices of properties on the Bulgarian Black Sea coast have dropped by 15-30% while those of inland properties by almost 70%.

Newly built apartments sell for 390 Euros per sq m. In Sunny Beach there are completed apartments for sale for 20-30 000 Euros, which is below their value.

Properties in the big cities like Sofia, Plovdiv, Varna and Burgas have dropped their prices by 30%.

Some analysts claim that the buyers now come mostly from Russia and the former Soviet republics and that there is no recession on the property market in Bulgaria but just restructuring. The quality properties keep their prices while the low quality ones sell at their real price which is a positive tendency, according to them. The Russians mostly buy luxury properties on the northern Black Sea coast at prices exceeding 250 000 Euros. The interest towards mountain resorts has decreased.

Dnevnik Daily

A new public institution will be set up in Bulgaria to manage and control amounts from all real estate transactions in an effort to bring them into the light and crack down on money laundering in the industry.

The new Deposit and Consignation Fund will be inaugurated by special legislation hammered out by the Ministry of Justice and the Notary Chamber.

The institution will be a state-owned enterprise and not a bank and will be modelled on a system already operational in France, said Notary Chamber head Dimitar Tanev. Under the scheme, the sellers will receive their money with a short delay but it will ensure transparency and security to all loyal parties as well as central and local authorities.

The system will see buyers transfer the money into the fund where it will spent two or three weeks before it is passed on the seller. The period will be used to check up the resource’ origin and charge all dues of the government and municipalities. It is expected to put an end to sham transactions and block cash payment as money will have to be put into the fund by a bank transfer, Tanev explained.

Market values in the different regions will be determined by experts and updated every three or four months. The price will serve as a reference point for actual property transactions to make sure money laundering and tax evasion is prevented. A difference within 10-15% could be assumed thanks to property improvements but current differences topping out at between 300% and 1000% will be impossible, Tanev said.

The Notary Chamber discussed the proposal with representatives of the European anti-fraud office OLAF, who said the project will indicate the country’s commitment to combat abuse and money laundering.

In the first half of 2009, the worldwide recession has had its effect on the market of commercial property in Bulgaria – the number of frozen and delayed projects of shopping centres and malls.

Among the frozen projects in Sofia are Euro Park for 500 million Euros, Sofia Acropolis for 500 million Euros, Tsarigradski Mall (35 million Euros) and GLS Mall. In the country the largest frozen projects are Grand Gallery in Burgas for 35 million Euros, Litos Ibuild in Pazardjik and two shopping malls in Kazanluk.

At the same time GTC has delayed the completion of its three Gallery projects in  Russe and Burgas by 6 months, and in Varna by 4 months.

Since the beginning of the year two bid shopping malls have been completed – Mall Plovdiv and Burgas Plazza with rental area respectively of 20 000 sq m and 26 000 sq m. With them the total area of all shopping centres in Bulgaria has reached 233 460 sq m, an increase by 25% in comparison with the end of 2008. At the end of June 2009 there are 31 sq m of retail space per 1000 people, while in 2008 it was 25 sq m.

At the same time the average decrease of the purchase price of the commercial properties in Bulgaria in the first half of 2009 is of 6.71%. There is also a decrease of the rent of 18% on average for the country. The highest decrease both in purchase prices and in rents is in Sofia and the big seaside towns. The rents in the shopping centres in Sofia have fallen by 25% and vary from 12 to 45 Euros per sq m. The analysts expect a further decrease by 15% by the end of 2009.

The construction of buildings in the forests will stopped with a moratorium on the change of the purpose of exchanged land formerly belonging to the State Agricultural and Forestry Fund, according to the new Bulgarian Minister of Agriculture Miroslav Naydenov.

5% of the newly built hotels will become ‘dead zone’ within 10 years – abandoned hotels with stolen windows, doors and tiles, hanging cables and no roofs, according to analysts.

At the moment 20% of the hotels in Bulgaria are closed and at least 5% of them are not viable from a business point of view in terms of position, size, materials and type. If these hotels are not restructured within the next few months, one year the most, they will continue incurring loss.

Experts say that the solutions for such kind of hotels is to turn them into hospitals, hospices, old people homes and even jails, children’s camps, business centres or apartment buildings and to sell them. Still it is early to say that there is such kind of tendency in Bulgaria. At the moment there are more than 700 hotels and apartment complexes for sale in the whole of the country.

This negative tendency will affect a great part of the many apartment  complexes in the next three years.  Some analysts think that a possible solution to the problem is to introduce the necessary legislation which will allow timeshare in Bulgaria. The purchase of a holiday home or apartment is not profitable at the moment because of the high prices and the fact that it is usually used for about a month per year, according to experts.

Office space, shops and industrial space are rented on average for 5 years in Bulgaria. In case of contracts with longer term, the rent is lower than the average and the tenants secure the use of the office for a long time. On the part of the owner long term rental contracts secure a guaranteed income from their property for a long time.  Rents in Bulgaria are updated by using a standard method of measuring of the inflation on the basis of the prices of goods, used within the EU. As in most countries the rent in Bulgaria is calculated on a monthly or on an annual basis. The terms for the extension of the contract are usually set in the contract but when the term of the contract expires and the tenant continues to use the space, it is considered that the contract has been extended indefinitely. In such case the contract is terminated by a notification given by any of the parties one month in advance.

The priceses of houses on the Black Sea coast in Bulgaria have fallen on average by 26% and in some cases they go as low as 200 Euros per sq m.  However, the supply of properties for sale has dimished as only owners who need cash urgently sell.  The supply of properties in the southern part of the Bulgarian Black Sea coast has dimished more then the one in the northern part. The prices in the south vary from 400 to 935 Euros.  In some villages the prices of houses have fallen from 13% to 26%, while in other the prices have not changed and even increased by 3%.  The prices in Sveti Vlas for example have gone up by 4% because the number of old houses for sale has descreased while the number of the luxury newly built properties has increased.  In one year the price has risen from 887 Euros/sq m to 923 Euros /sq m.  Similar is the situation in Chernomorets, which has  become popular in the last four years.

In comparison to the south, the properties on the Bulgarian northern coast have always been more expensive. However, the tendency there is exactly the opposite – the prices of houses have decreased and now they vary from 300 to 730 Euros/sq m. The highest price drop is in Kichevo where last year the choice of houses for sale was twice greater than now and the average price was 764 Euros/sq m.  Now, the average price is 593 Euros/sq m.  In other places like Shkorpilovtsy the number of the properties for sale in June 2008 is exactly the same as in June 2009, but the price has dropped by 14% to 593 Euros/sq m.

In general, the analysts think that the prices of houses on the Bulgarian Black Sea coast will not drop too much as their number is limited and already their price is lower than the one of the apartments in the newly built developments.

More than 70 hotels in the area of Varna, among them 4-star hotels in Golden Sands have been put for sale.  Almost all of the hotels are open and operating, only a few are still being built. The small family hotels are predominating among them. All the sale prices of the hotels are in Euros, 14 of them are above 1 million Euros. The highest price is for an apartment building in Golden Sands and it is 15 million Euros. This development is still under construction and according to the plan it must be a 4 star complex with its own SPA, restaurants, cafes, open air and indoors pools and park. Another 4-star hotel right on the beach in Golden Sands is for sale for 14.2 million Euros, and a 3-star hotel with 232 rooms, SPA and a restaurant with 200 places is offered for 13 million Euros. The cheapest hotel is a 3-storey villa which is being sold for 210 000 Euros.

The highest number of hotels are located in Golden Sands – 17. In St Konstantin and Elena there are 15, in Alen Mak -11 and in Evxinograd  there are 8, while in Journalist – 5. There are some hotels for sale in Sunny Day, Trakata, Manastirski Rid, Borovets and Priboy, as well as in Priseltsy, Byala and Shkorpilovtsy.

The construction of new apartment buildings, offices, shops, roads and others has decreased by 11% in May 2009 in comparison with April 2009, according to the information of the National Statistics Institute based in Sofia. The sharpest drop is in the number of the new apartment buildings closely followed by infrastructural projects. In comparison with May 2008 the volume of construction has shrunk by 15%. This drop is due to the much smaller number of new apartment and office buildings and new shops.

It is expected that the prices of apartments in Bulgaria will reach a new bottom at the end of this year and in the beginning of the next one.  The analysts predict that the further decrease will be moderate and will not exceed 10%.  The property prices will stabilize in the first half of 2010.

So far this year apartment prices have slumped by 10% on average and the highest drop is of apartments in prefabricated blocks from the days of socialism – 12%.  The lowest drop is of finished new properties – by only 4%.

The highest decrease of the property prices in Sofia has been in the top notch areas of the Doctor’s Garden (by 33%) and in Ivan Vazov (by 17%)

Many new construction projects situated beyond the ring road of Sofia and in Manastirski Livadi have been put on hold due to the recession. At the moment all off-plan purchases have stopped.

The construction of two new shopping malls in Sofia have been stopped – Europe Mall and the Mall of the Spanish company Riofisa. Currently the rent of commercial space in shopping malls have fallen to 41 EUR/ sq m while in the central boulevards of Sofia it is 100 EUR/sq m. Big retail chains – Billa, Carrefour, Kaufland and Piccadilly – have taken advantage of this situation and have opened new shops. Analysts think that the rents will not go up before the shops start making much higher turnover.

In the first half of 2009 the rental space in shopping malls have increased by 50 000 sq m and have reached 220 000 sq m in total.  This is the reason why it is more and more difficult for their owners to find tenants for all empty spaces. In Sofia the situation is better and there almost no malls with empty shops. However in the country the situation is different. Retail centres with good location have 3% of their space free, while the others have more than 10% of their space empty.

Concerning office space, 13.4% of it in the central parts of Sofia and 20% of it in the outskirts of the city have been empty. In the central parts of the city prices are still high but in the greater center of Sofia the prices have fallen by 1.5 EUR/ sq m. In the outskirts this decrease has reached 12 EUR/ sq m or the levels of 2006.

According to specialists the freight forwarding and logistic centres and warehouses have been doing better than any other properties in the country. Their rents are the same as last year due to the fact that these properties have developed later than all other types and currently there is a demand for logistics’ space.

Office rent in Sofia has decreased in comparison to the end of last year and at the moment is between 10 and 15 Euros/sq m. The decrease is due to mainly two reasons. Firstly, the economic recession and secondly, the highest number of new offices for rent, both because of the high number of newly completed office buildings and the bankruptcy of companies which leave their offices.

The office rental market follows the economic situation in Bulgaria. However, according to analysts, the future tendencies will depend to a great extend on the investors. An investor who has already rented 60% of the building before its completion is less likely to accept lower rent than the investor with an empty building. Additionally, it is important how many projects an investor has and whether they are profitable. Last but not least, offices with good location and effective use of the space, with enough of parking space and with access to the necessary technology are unlikely to rent for less.

The ex-pats who have moved to the Bulgarian Black Sea coast are selling their properties and leaving Bulgaria in great numbers. They have lost their hope to make a profit by renting their apartments. They offer their properties for sale at prices which are 20% lower than in the last year. Studios are for sale for as little as 38 000 Euros and two-bedroom apartments are on offer for about 60 000 Euros. The second-hand car markets are full of British cars which sell at half the price of the ones with a left steering wheel. Many of the Brit who have settled in Bulgaria are pensioners and some of them find it hard to cope during the recession and sell their apartments, houses and cars.

The direct foreign investment in  construction and in properties  in Bulgaria in the first quarter of 2009 was 208 million Euros which is a decrease by 59.3% in comparison to 2008 whe it was 511.2 million Euros.

In the first half of 2009 the prices of properties for sale in the country have decreased by 5.95% on average while the rents have decreased by 6.59%, according to the official statistic. From December to May the prices of properties have fallen by 10% in Sofia, by 6.13% in Varna and by 10.25% in Burgas. The most insignificant price drop was in Blagoevgrad – 0.67%.

Most of the deals, however,  were at 20% lower prices than the advertised prices.  The number of purchases from January to March 2009 was 35 433 which is by 37.27% less than in the same period of 2008 when there were 56 483 purchases.  Some analysts expect the number of the purchases to fall by 50% on annual bassis.

In this year due to the limited mortgage lending 70% of the sales were financed by personal savings while in 2008 not less than 80% of the properties were purchases with mortgages.

Until now the information about repossessed properties offered at auctions was only available at the offices of the private judges, in the municipalities and the in the regional courts. Often this information which had to be available a month before the auction disappeared.

Now, the cheap repossessed properties which judges sell in Bulgaria can be found on the web. The Chamber of the Private Court Executors publishes information for upcoming auctions at http://www.sales.bcpea.org

At the moment there are 164 announcements for the sale of all types of property – apartments, houses, warehouses, plots of land, etc. The information is constantly updates. The highest number of announcements have been made by the Sofia City Court. Among them are auctions for apartments with a starting price of up to 60 000 levs (30 000 Euros) . For example, the bidding for a one-bedroom apartment on Alexander Stamboliysky Boulevard will start at 52 400 levs, while the bidding for the same size of apartment by located in Hadji  Dimitar at 65 000.  Bidding for apartements in the areas in the outskirts of Sofia start at under 20 000 Euors.  The announcement coming from other Bulgarian cities are quite interesting.  In Varna the bidding for a two-bedroom apartment will start at 80 000 levs and for a villa at 105 000 levs.  In general currently there are eight houses in the country at prices under 10 000 levs.  The most expensive offers are: a factory in Burgas with a starting price of 29 826 750 levs and a house in the affluent Dragalevtsy in Sofia with a starting price of 760 000 levs.

If an auction fails and nobody bids for a property, there is a second auction and the price drops by 20%. The successful bidders must pay the whole amount of the price of the property within 7 days. Potential bidders’ only worry is that the former owners of repossessed apartments can appeal against the repossessions.