LM Legal Services Blog

In the first quarter of 2012 the property prices in Bulgaria have decreased in 17 regional cities on an annual basis, while price increases have been registered in 10 cities. In 2011 the property prices have dropped by 6.1% on average and at the end of last year the average property price in Sofia was 750.5 Euros per square metre.
In the first quarter of 2012 the average property price for the whole of Bulgaria was 477 Euros per square metre. The properties in Sofia remained as the most expensive ones in the country, closely followed by the properties in Varna and in Burgas. On the average the property prices in the first quarter of 2012 have dropped by 0.4% in comparison with the last quarter of 2011.

In the last year the property prices in Sofia continued dropping. The sharpest decrease was of the prices of studios – which have dropped by 6.9% in comparison with April 2011. Now they sell for less than 700 Euros per square metre, while in 2011 their price was 733 Euros per square metres on average. Last year one-bedroom apartments used to sell for 770 Euros per square metre but now they sell for 723 Euros per square metre, a price drop of 6.1%. The prices of two-bedroom apartments have dropped less then the rest – by only 4.6% from 754 Euros in 2011 to 719 Euros now.
The one-bedroom apartments are the most popular ones and buyers prefer them to the two-bedroom apartments. The cheapest one-bedroom apartments last year could be found in the area of Tolstoy, 552 Euros per square metre, while this year the cheapest one-bedroom apartments are located in Malinova Dolina and fetch a price of 468 Euros per square metre. The most expensive one-bedroom apartments last year have been located in the affluent area of Ivan Vazov with an average price of 1286 Euros per square metre. This year, the most expensive one-bedroom apartments are located in the central area of Oborishte with average prices of 1167 Euros per squre metre which is a price drop of 9.3%.

In 2011 the prices of offices in Bulgaria continued dropping, although the average decrease of 3.48% on an annual basis is nothing near to the 18% drop in 2010. Buyers usually expect a price decrease of 30% in case of purchase. The highest price drop was in Blagroevdrad – by 7.71% and in Varna by 6.35%. In Sofia it was minimal – 0,93%. According to the analysts further sharp drops of the office prices are not expected.
At the same time the rental prices of office space have dropped by 18.38% on average for 2011. The sharpest drop was in Blagoevgread – by 26.72% and in Varna – by 25.73%. In the capital Sofia the office rents have increased by 3.08%.
The average yield of office space is 10.59% in Blagoevgrad, 9,71% in Varna and 8.18% in Sofia.

The expectations of analysts are that the property prices in Bulgaria will continue to drop on average by 5%. The top prices fetch luxury properties in Varna on the Black Sea, where they sell on average for 1500 levs (760 Euros) per square metre, while the properties in the capital Sofia are in the second place with prices of 1468.10 levs ( 700 Euros) per square metre.
In 2012 the market of holiday properties will keep relying on the Russian buyers, as their interest towards properties in Bulgaria has not been affected by the recession like in the case of the Irish and the British buyers. The prices of some of the holiday apartments and houses have dropped by 50% since 2008 and this makes them even more attractive for the Russian buyers. The expectations that Chinese and Middle East investors will start buying properties in Bulgaria failed to materialize.

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.