According to the Bulgarian Inland Revenue Agency about 177 million levs (85 million Euros) have been declared as income from rent of property. The total amount of the declared income that also included the income of free-lancers was 587 million levs or 290 million Euros. In the second largest Bulgarian city Plovdiv, despite the recession, the highest capital gain tax for 2011 was paid by an estate agency and it exceeded 425 000 levs (270 000 Euros). The second highest capital gain tax for 2011 was paid by yet another estate agency. The twenty richest Bulgarians have declared incomes from work that amassed 16 million levs (8 million Euros).

According to the Land Registry, the property sales in the Bulgarian capital Sofia have increased for a second consecutive quarter reaching 3324 sales in the first three months of 2012. On the average in Sofia have been completed 37 sales per day – an annual decrease of 8.8%. The property prices in the capital have increased on the whole and now properties in Sofia are more expensive than properties in Varna, Bulgaria’s Black Sea capital, where for years property prices have been the highest in the country. The average price in Sofia is 1 453.30 levs (appr. 750.5 Euros)/square metre, while in Varna it is 1439.00 levs (appr. 740 Euros)/square metre. In third place are property prices in the second largest Bulgarian city on the Black Sea – Burgas – 1158.83 levs (appr.592 Euros)/ square metre.

According to leading Bulgarian banks, the value of the properties owned by Bulgarians has decreased by 3 billion levs (1.6 billion Euros) to 208 billion levs (106 billion Euros) in the last quarter of 2011. At the same time the savings held in bank accounts have increased by 1.4 billion levs and at the end of last year they have reached 30.9 billion levs (16 billion Euros). The debt of the Bulgarians has decreased and currently is under 52%. The loss from investments in shares has increased to 285 million levs (190 million Euros) at the end of 2011, an all time record.

The sale of agricultural land in Bulgaria has peaked up in March 2012 after two months of stagnation due to the winter. The areas of Vidin, Stara Zagora, Razgrad and Haskovo are the most attractive for the buyers. In 2011 the number of sales of agricultural land has increased by 10-13% on the average and in same areas has reached 25%. In 126 000 purchases the buyers have acquired 1,185 million decars of land. The secondary market has a share of about 50% of the purchases and the expectations are in this year this share will grow to about 70%. The increase of the rent of agricultural land has been significant.

The National Union of the Bulgarian estate agents will propose to the parliament to pass the drafts of the new Law for the Work of the Estate Agents. This project has the support of the Notary Chamber, the Surveyors Chamber, the Builders Chamber and the Confederation of the Customers in Bulgaria. Such kind of law will regulate the business of the estate agents in the country and will impose clear rules and obligations. The new law aims to provide quality service and to establish professional ethics. All members of the union have expressed their readiness to cooperate with the state in its attempt to block all opportunities for money laundering through property purchases and sales.

In the beginning of 2012 the market of rural properties in Bulgaria is slower than in the same period of 2011. This might be due to the exceptionally harsh winter this year. The average price of houses sold in rural areas in the first two months of 2012 is 15 500 Euros. This price for the same period of last year was 18 900 Euros. At the same time, in 2011 there more sales of houses in the 35-45 000 Euros range. The prices of rural properties peaked in 2004-2005 but have fallen six times since then and are now selling at the price levels of 2006. However, now buyers focus on much better rural properties.

In 2011 the main interest was in rural properties in Central Bulgaria and along the Black Sea coast. The expectations are that this tendency will not change in 2012.

Globally, the investments in business properties have increased by 14% in 2011 in comparison with 2010. The highest growth was in North America – 52%, followed by Europe and the Middle East – 17%. In Central and Eastern Europe, these investments have reached 19 billion Euros in 2011, which is a growth of 76% in comparison with 2010. This is 68% of the volume of their volume during the property boom years.
In 2011 the investments in business properties in Bulgaria have increased sharply in comparison with 2010. In 2010 they were 20 million Euros, while in 2011 they reached 198 million Euros, which has put the country in the first place regarding this type of investment. In the second place is Slovakia with an annual increase of 534%, followed by the Czech Republic with 366%, South Africa with 269% and Switzerland with 216%. However, the annual yield in Bulgaria has not changed – for office spaces it is about 9,5%, for shops – 9% and for industrial space it is 12%.

Many construction projects in Bulgaria launched in the days of the property boom have been left unfinished. Some people look at this as an opportunity to destroy these semi-finished buildings in order to collect scrap which they later sell. The most striking case is in Blagoevgrad, not far from the ski resort of Bansko, where a Polish company could not complete the shopping mall which they started building on the site of the largest once dairy in the area. Three years ago the Polish investors paid 6 million Euros for the dairy. Now the only thing left from the unsuccessful construction project is shapeless concrete, as all iron bars have been sold for scrap. There is no sign of the investors and they had not paid their property tax, which hinted Kostadin Paskalev, the former mayor of Blagoevgrad to ask Interpol for help to find them.

Although in comparison with other Central and Eastern European capitals the property market in the Bulgarian capital Sofia is not so profitable at the moment, still in 2011 it has displayed signs of stabilization. In comparison to 2010, there was not much change in the demand and in the properties on offer. The situation in Sofia looked similar to the one in Budapest, Kiev, Bucharest, Zagreb and Ljubljana. However, the experts claim that this is the beginning of stabilization. The volume of the purchases in 2011 has increased steadily and at the same time there was a slight increase in the number of the properties for sale. The decrease of the selling price in the last year has not been so drastic as in 2009 and 2010. However, Sofia is far away from Warsaw and Ljubljana where the average prices were close to 90% of the prices during the property boom years.

According to analysts the prices of apartments in Bulgaria will not decrease further. The experts refer to the prices of actual purchases, underlining that the advertised prices sometimes are unrealistically high. There is already are a mismatch of the demand and the properties on offer. The most desirable properties have sold and there is a lack of good quality homes. At the same time developers can not launch new projects because there is no financing. The off-plan sales have completely stopped. Some experts recommend that the properties prices in Bulgaria should not be calculated per meter, as this can some times lead to confusion.

According to the Bulgarian National Statistics Institute the number of the completed new buildings in Bulgaria (in the country the buildings must receive the so-called “Permission to Use – Act 16” to be considered completed) in the last quarter of 2011 has increased by 34.5% in comparison with the previous quarter, totaling 928. The number of the new apartments however has decreased by 8,1 %. Across the country the highest number of buildings and apartments has been completed in Varna (188 buildings and 815 apartments); Burgas with 127 buildings and 826 apartments is in the second place.
At the same time the average living area of the newly built apartments has increased by 11,4% in the last quarter of 2011 in comparison with the previous quarter. The highest increase was in Gabrovo, followed by Montana.

The amendments to the Bulgarian Law of the Forests were passed by the Bulgarian Parliament. According to them ski slopes can be constructed on state owned land without the need to take out this land from the forest fund. Some of the amendments concerned the production and sale of timber.
The easement (the right to build) on plots of land situated in forests shall be granted for the construction of ski slopes, electricity poles and poles for gondola lifts and ski drags or “other poles for transport without an impact with the ground”. The easement (right to build) shall be considered granted to all plots of land situated in forests as from the date of the execution of the detailed organization plan for the construction of state owned national sites, the republic’s road network, including the reconstruction of the affected technical infrastructure.
According to the amendments, the certificates for export and import of raw timber will be abolished.

The Bulgarian Ministry of Finance has issued state bonds to the value of 35 million levs (18 million Euros) with maturity date in seven years time and a coupon of 4.45%, which shows increasing trust of the investors. The bonds were bought by banks (about 36%), pension funds (48%) and insurance companies (13%). The coupon of the state bonds is much higher when a country is experiencing financial difficulties like Hungary ( 10,04%) or when its economy is booming like Turkey (5,74%) and Poland (5,05%).

The prices of large properties in Sofia have dropped sharply. Only in the area of Oborishte where the most expensive properties in the capital are located, prices have increased by 4% and start at 923 Euros/sq.m. , reaching 4331 Euros/sq.m. At the same time in the affluent area of Lozenets the property prices have dropped by more than 1/5 in the last two years. The lowest price there is of 816 Euros/sq.m. The most serious price drop – of 23% – in the expensive areas of Sofia is in Beli Brezi. More than 700 apartments located in affluent central areas of the city have been put on the market.

The Daily Telegraph has published the ranking of The Global Property Guide Europe’s Top Places to Invest in Property. The Bulgarian capital Sofia took 17-th place overtaking Prague (18), Paris (20), Lisbon (22) and London (26). According to The Global Property Guide, the positive feature of Sofia is the pro-landlord rental market. The negative feature is that the rental yields are poor – 4,19% – the transaction costs are high, the rental income tax is moderate and the corruption is strife. The capitals of many other Balkan countries feature better than Sofia. Ljubliana, Slovenia’s capital is in place 14, Bucharest, the capital of Romania, is in place 12, Zagreb, the capital of Croatia is in place 5, Istanbul is in place 4 and Skopje, the capital of Macedonia is in place 2.

According to the analysts, there are three tendencies concerning the commercial property market in Bulgarian in 2012.
The first one is that the number of buil-to-suit industrial centres has increased due to the increased volume of outsourcing of light industrial production from Western Europe into Bulgaria. Bulgaria is attractive with low taxation and low cost of labour.
The second tendency is that the relocation of companies into newly build office centres has intensified due to the fact that the owners offer 5 to 7 year rental contracts at attractive prices and this allows the companies to cut costs during the recession.
The third tendency is that six new shopping centres are under construction throughout Bulgaria and of them three will open in 2012 – Bulgaria Mall, Paradise Centre and a new mall in Bourgas.

In comparison with the second quarter of 2011 the property prices in Bulgaria have dropped by 0,8% according to the National Statistics Institute., mostly in 20 regional towns. The highest decrease was in Smolyan – by 4,7%, followed by Yambol – 4,25 and Pleven by 3.7%. The average property price for the country in the third quarter of 2011 was 901.32 levs/square metre. The highest prices were in Varna – 1 493.33 levs/square metre, Sofia – 1456.48 levs/square metre and Burgas – 1184.41 levs/square metre.

The creation of the Law for the Public-Private Partnership has been prolonged more than the creation of any other Bulgarian law. On the one side there is no urgent need for this law, as most of the activities in its scope have been covered by other laws. On the other hand the Law for the Public-Private Partnership in Bulgaria has always caused doubts for corruption and the discussions about this law have always created negative emotions.
Now the draft is in the Bulgarian parliament. The public-private partnership has the potential to be applied in serious infrastructural projects like the construction of motorways or airports, as well as services like education and health. The distinctive feature of this law is that according to it the state or the municipalities will pay private companies for the provision of services just like the private bus lines in the cities. However, the difference is that this will be for the period of a few decades.

The Bulgarian Ministry of Justice has prepared the draft for new amendments to the Penal Code which focus on fighting corruption crimes committed by foreign officials, according to the Deputy Minister of Justice Daniela Masheva. Mrs. Masheva underlined that Bulgaria is not an isolated example of a country where such crimes ocurr.

The deadline for re-registration of companies in Bulgaria will expire 143 days ago. In practical terms this means that all companies registered in Bulgaria prior to 2008 (when the new Commercial Register started working) will have to submit documents for re-registration. All companies failing to do so will be terminated by the State authorities and their owners will be required to cover the expenses for the proceedings.

Unlike some websites who claim that this should be done before June 2010 in fact there is enough time to complete the procedure but in any case this matter requires urgent attention from anyone who has a company in Bulgaria registered before 2008 and especially if this company owns property in Bulgaria (apartment, land, house, etc).

Should you wish to use our services for re-registration of your company in Bulgaria please do not hesitate to contact us for a quote.

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.

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.

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.

According to the British estate agents Knight Frank by 31 March 2009 the property prices in Bulgaria have increased by 3,3% annually and in the first three months of 2009 they have decreased only by 1,2%, which puts Bulgaria in ninth place in terms of property price growth.

The information provided by the Bulgarian National Statistics Institute (NSI) shows that in the first quarter of 2009 the property prices have fallen by 12,4% and by 8,4% on annual basis. According to NSI from January to March 2008 the properties in Bulgaria cost on average 1299,9 levs (650 Euros) per sq m. In the first quarter of this year this price has fallen to 1190,7 levs (just under 600 Euros) per sq m. If the information of the NSI is taken into account, then Bulgaria will be in the top ten shrinking property markets.

In the first quarter of 2009 the property prices in 32 out of 46 countries world wide have fallen. The most serious price decrease has been in Singapore, Dubai and Latvia. In Latvia alone the prices of property have been steadily falling in the last two years and only in the last 12 months they have fallen by 36%. In Dubai the prices have fallen by 40% only in the last three months. The short term forecast is that the recession will continue at least until the end of 2009.

Jessie Hewitson, The Observer

Back in 2006, Andrew and Pat Pryce decided to buy an investment property in Bulgaria. With retirement looming, they were hoping for rental income to supplement their pension, and a flat they could eventually sell on at a profit. When they read on the internet about the Mechi Chal mountain lodge in Pamporovo, advertised by overseas property agent Someplace Else as “the most exclusive in Bulgaria’s booming ski resorts” and offering a guaranteed rental yield of 7% a year for the first three years, they put down a deposit of £19,485.

It was a year later, in 2007, that they had the first inkling that something might be wrong. No one was asking them for more money, and there seemed to be no evidence that building was taking place. By 2008, they were so concerned with the lack of progress that they went to Bulgaria and drove around Pamporovo to investigate for themselves.

“We couldn’t see any sign of the development,” says Andrew. “On a second visit we attempted to locate the agency’s Bulgarian office in Plovdiv, but found it inhabited by another company.”

Having lost faith that the development would ever be built, the Pryces asked for their deposit to be returned. They say Someplace Else agreed to this more than a year ago but, despite being promised the money on three occasions, they have received only £2,000. They have now consulted a lawyer.

The Pryces are not alone. Since January 2008, the Association of International Property Professionals (AIPP) – a voluntary organisation with 376 members – has received 116 formal complaints from buyers unhappy about purchases abroad.

The number of people who have lost money in projects around the world is likely to be far higher than most realise, partly because nobody is keeping a record, and partly because those who have lost money are too embarrassed – and upset – to talk about it.

John Howell, senior partner in the International Law Partnership, specialising in overseas property purchases, estimates that 20% of those who have bought off-plan in the past two years are likely to run into “significant difficulty”. According to AIPP estimates, in 2007 193,600 of us bought property in the 10 countries most favoured by British buyers. This means more than 38,000 may be in hot water from just a single year’s overseas property purchases – and some may not even realise it yet.

The collapse of Churchill Properties Overseas alone meant about 340 investors, mainly British and Irish, lost deposits worth an estimated £4m. The company, which sold property in Estonia, Cape Verde and Goa, went into “voluntary liquidation” last summer.

Out of pocket

Another high-profile company, Bulgarian Dreams, closed at the end of 2008 and is currently being investigated by the City of London Police economic crime department. It is impossible to know exactly how many of its investors – who have bought in more than 40 developments in the eastern European country – have been left out of pocket.

Some of the estimated 100-150 investors who, like the Pryces, bought off-plan apartments in the Mechi Chal lodge, are leaving desperate posts on property forums and seeking legal action to get their money back.

Ben Mason, a partner of Someplace Else, says the delays have been caused by the local water authority rescinding permission it had previously granted. He is hoping to get it reinstated. “Providing this happens in the next two months, we can get the first phase finished by December this year and the second phase completed by December next year,” he says.

Mason admits the development is hard to find, but claims that the foundations are in place for phase one, many of the houses have been built off-site and when they do get water permission, the Bulgarian office will reopen.

As for the Pryces’ deposit, he says: “Due to the current economic climate, it has taken us longer than we expected to make this refund from the UK … however, there is no question of the Pryces not receiving the balance of their deposit, with interest, over the next few weeks.”

Howell notes that the developers in trouble are not typically local but British would-be Donald Trumps, and new to the game. “Many of these developers probably started off with good intentions but soon got in over their heads,” he says. “Whether it was fraud or bad economic times is a moot point, frankly, because the end result is the same: people lose money.”

Bad lands

Derek Smythe (not his real name) is more than aware of his predicament, and resigned to losing the £30,000 he invested in 2006 into a company that promised to buy land in Montenegro, get planning permission, build and sell on.

“Since investing the money, I’ve had virtually no communication from the directors [both British],” he says. “There’s no evidence that the money was used to purchase any land at all – I have absolutely no idea what happened to it. It’s been pretty miserable – and the worst thing is, it’s all my fault as I didn’t ask enough questions.”

The sums of money being lost are vast: Howell recently met 70 people, mainly Britons, who had sunk an average of €80,000 (£70,000) into a troubled development in Bulgaria.

He also has clients who regret buying in Dubai. “The problem is that all the major building companies belong to the royal family, and you won’t find a lawyer who will sue.”

The range of people losing money this way spans class, gender and age: young, old, working class, middle class, the gullible, the naive and the greedy are all suffering alike.

“I’ve got clients who are working-class people who invested the £20,000 equity they had in their home, and high-flying professionals who frankly ought to have known better,” says Howell, adding that one client who got stung was a partner in a chartered accountancy firm.

Many of these problems would not have happened if the investors had sought the advice of a good lawyer – something that many of the people interviewed for this article bitterly regret not doing.

Expat Properties Plc created for the purpose of buying land, is the first plc of this type in Bulgaria which has returned its license. The general shareholders meeting will take place on 8 June 2009 when it is expected that the shareholders of the company will take the formal decision for its liquidation. It is also expected that the shareholders will give a deadline of 6 months for the liquidation and will choose a receiver. The last deal of Expat Properties Plc was on 16 April 2008.

The planning permissions for apartment buildings which have been issued in the first three months of 2009 have been by 40% less than in the same period of 2008, according to the National Statistics Institute. 1470 projects have received planning permissions from January to March 2009. They are for 6530 apartments with a total area of 895 173 sq m. The number of the apartments has decreased by 49% and of the total area, also by 49% in comparison with the same period of 2008.

79 office buildings, as well as 978 other type of buildings – industrial, etc – have received planning permissions. The number of administrative buildings is by 21% less, while their total area has increased by 21%. The number of all other types of buildings has decreased by 36% and their total area has decreased by 44%.

The only tendency that continues into 2009 from the same period of 2008 is that the major part of the planning permissions for new apartment buildings have been issued in the large administrative centres of the country -
Burgas – 185, Sofia – 182, Varna – 170, and Plovdiv – 158. The number of newly planned apartments in Sofia is 1340, in Varna – 1 305, in Burgas – 896, in Blagoevgrad – 668 and in Plovdiv – 537.

Jack Fagan, Irish Times

AROUND THIS time of year, the newspapers are generally packed with large ads for overseas real estate. That has been going on for over a decade but, in recent years, Bulgaria and other former Eastern Bloc countries have been particularly active in targeting Irish buyers who had a reputation for being big spenders during the Celtic Tiger years.

These overseas property ads are rarely, if ever, seen any more simply because Bulgaria’s real estate boom has turned to bust and Irish and UK buyers are fleeing due to rapidly falling values and the rising number of uncompleted developments.

Other former Eastern Bloc countries are suffering the same fate.

Bulgaria became a particular favourite for many Irish investors because holiday homes were frequently available at half, or even one-third, of the price of similar properties on the Costa del Sol. Attracted by unrealistic promises of exceptional returns, Irish investors had no hesitation in borrowing heavily to buy cheap buy-to-let homes.

Dublin mortgage agents say that, because of the refusal of Irish banks generally to fund property investments in Bulgaria, many purchasers released equity from their homes or Irish-based property investments. Others used hot money in the belief that the Revenue had enough on its plate in tracing second homes and investments in Spain, France, Portugal and other popular destinations without traipsing through the former Eastern Bloc.

“A great deal of the money invested in Bulgaria never appeared on the radar. It would be hard to trace,” says one of Dublin’s largest mortgage lenders.

Tom McGrath, a Dublin solicitor specialising in the overseas residential markets, says that a combination of naivety and greed led many Irish people to buy up to five properties in Bulgaria with the intention of “flipping” them on before they were completed to make a profit.

Any number of estate agents had recommended this as a fool-proof way of making money but the reality was different and they have been left “with properties that they do not want, cannot sell and cannot afford to complete on”.

The market in Bulgaria is over-supplied and pretty well on the floor. Real estate agencies say that at least one-third of the 2,200 foreign-owned holiday flats in Bansko – one of the country’s top ski towns – are on the block again, often at half price.

One media report has suggested that some Black Sea hotel owners have offered their debt-laden businesses for sale for €1 – grim news for tourism, Bulgaria’s top foreign investment sector.

The property market in Bulgaria, like Ireland, has had a hard landing. Construction firms have been laying off workers and, with bank borrowing getting more difficult, many developers are finding it increasingly hard to complete schemes.

McGrath says that promises of guaranteed rent from developers are often unfulfilled and these properties were overvalued in the first instance to take account of this arrangement.

Investment in the property sector, which accounted for 30 to 40 per cent of GNP in the past few years, brought an immediate profit, says local economist Tihomir Bezlov: “Real estate for Bulgaria was like oil and gold for other countries.”

The same could probably be said of Ireland but, unlike Bulgaria, there was never any suspicion here that the industry was being used to launder money from criminal proceeds.

Bulgaria’s authorities have admitted they cannot prove where the money that fed the boom came from. Could some of the proceeds of the Northern Bank robbery in Belfast in 2004 be in the Black Sea? There’s a thought.

Now is the best time to buy a property. the property prices have dropped significantly and there are no expectations for further decrease, according to large estate agencies. The average decrease of the prices in Sofia since the beginning of 2009 is 6%. The price drop is more significant – of up to 15% – in affluent areas where the prices have been unreasonably high during the property boom, like the Doctor’s Garden in Sofia, as well as in areas with bad infrastructure. By the end of the year prices will drop further by 5-6% but not more, say analysts. Even if there are further price reductions, buying property now will be profitable in the long run. Buyers can naturally wait a bit longer but it is not sure how much of their money will be eaten by the inflation.

The development of the property market in the next few months will depend on the economic recovery and on the job security of the buyers. According to bankers, many governments work toward the increase of the amount of cash in their countries so the increase of inflation is a normal consequence of the recession. As Bulgaria is in the conditions of a monetary board, the inflation is imported and it is a sign of the recovery. However, the recovery will not be felt before the middle of 2010. In this connection, prices will fall further but only of properties which are of lower quality or those belonging to developers who are now experiencing cash problems.

The number of new buildings in Bulgaria in 2008 was 2926 which is an increase of 8,5% in comparison with 2007. Most buildings have been made of concrete and steel, according to the National Statistics Institute. The average area of a newly built apartment is 78,2 sq m, while some years ago it was 80,6 sq m. The largest average apartments are in Gabrovo and Dobrich – 121, 3 sq m – while the smallest ones are in Pernik – 54,1 sq. m.