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.
Archive for July 2009
The average decrease of property prices in Bulgaria is by 23% in the first six months of 2009. There are areas of the country and especially cities where due to overpricing, now the decrease is exceeds 30%. The expectations of analysts are that by the end of the year prices will decrease further by 5% to 15%.
The most significant price decrease in the capital Sofia where the prices of newly built developments in the area of Obelya have dropped by more than 40%. The lowest price drop is in Student Town – by only 10%. In the affluent Lozenets and Iztok where the price exceeded 2000 Euros/sq m in 2008, now there is a decrease by 1/3. The decrease is similar in Liulin and Ovcha Kupel. In the down-market Banishora the lowest price of newly built apartments is 390 Euros/ sq m. The lowest prices are in the southern and the eastern parts of the city because there many apartments have been bought off-plan as investment and now they have been completed and put on the market.
In the first half of this year buyers preferred mostly one-bedroom apartments not exceeding 50 000 Euros per sq m. In the last month two of every ten buyers have purchased in the end a bigger and more expensive apartment than planned in the beginning due to the lower prices. The number of owners who sell their property to buy a bigger one has increased, as the difference in the price is lower than ever.
In most cases buyers used their savings for the purchase of a property, while 44% of them have taken small mortgages or even consumer loans. 32% of the buyers who took mortgages have problems repaying them regularly but only 17% of them cannot repay their mortgage at all.
Village houses with big yards sell even under their value around Veliko Turnovo, Pernik, Sliven, Haskovo and Yambol, as owners just want to get rid of them. In smaller towns the purchase of property is rarely for the purpose of investment but mainly it is in case of change of the marital status and the recession is felt stronger on the property market. Unemployment is growing faster and first time buyers are very cautious.
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.