August 21st, 2009 — 10:26am
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.
Comment » | Bulgaria, Legal, Property
August 4th, 2009 — 11:13am
The number of purchases of property in Bulgaria has decreased sharply according to analysts. In the first six months of 2009 in comparison with the same period of last year the number of property purchases has decreased on average by 42% for the country as a whole and by 58% for the capital Sofia, based on the information provided by the National Statistics Institute. The volumes of the current market are similar to the ones in 2005.
The tendencies which started in the last quarter of 2008 continued and even deepened in the first half of 2009. The buyers are currently waiting to see which way the market will go. Only those who can see a long-term profit risk buy now. Apart from the planned expansion of the big retail chains which started in the beginning of 2009, there has not been a single purchase of land for a big project. The prices of apartments have dropped by 9,7 % only in the first quarter of this year according to the National Statistics Institute. The average price for the country in the second quarter of 2009 is 1074,98 levs/sq m. The highest property prices are in Varna – 1827 levs/sq m, followed by Sofia – 1745 levs/sq m and Burgas – 1471,67 levs/sq m. The lowest price is in Kiustendil – 540, 85 levs/sq m.
The purchase prices of properties drop faster than the rents and returns are becoming higher. The reason for this is on the one hand the crisis in finding financing for a property purchase and on the other the fact that many prospective buyers stay as tenants and thus keep rents high.
The annual return of an apartment in Sofia in the first half of 2009 was 4,5% while in the last half of 2008 it was 4,1 %.
Comment » | Bulgaria, Property
June 5th, 2009 — 12:02pm
The property market in Bulgaria was in complete collapse for about six months but from mid-March the first signs of awakening have appeared. The decrease in the prices of the properties for sale is already a fact. In the last two months sellers started decreasing the prices more boldly. There are more reduced property prices in Sofia than in any other town in Bulgaria. This comes to prove that the market in the capital is more mature and flexible. The average reduction in Sofia since the beginning of the year is 13.23%. In the central parts of the city it is 14.9%. In the area around Vitosha Boulevard the prices have fallen to 1800 Euros per sq m and around the Doctor’s Garden the prices have gone down to 2000 – 2800 Euros per sq m. In the so-called greater center the prices have decreased by 9.34% to 1190 Euros/sq m. Along Bulgaria Boulevard they have gone down by 2.96% to 978 Euros/sq m. In affluent Lozenets the reduction is 12.6% and the prices are around 1600 Euros/sq m. If the prices on offer are compared with the actual prices from the deals, it appears that prices go down even further. On the whole the purchases in 2009 are completed at prices which are 25-28% lower than the ones in 2008. At the moment the difference between the offered price and the real price of the purchase is 15%.
In Varna, the second Bulgarian city, the property market seem to be weaker than is Sofia, mainly due to the prices that are still too high. However, there are some bold reductions of up to 40%. The average price drop is 9.97% since the beginning of the year. In the central parts and in the area of the Sea Garden the reduction is by 9% and the prices are about 1990 Euros per sq m. In Levski the reduction is by 3.9% and the prices are about 1074 Eur per sq m. In Briz the drop is by 9.8% and prices are about 1160 Eur/sq m. The actual purchases are at price which are 30% lower than those in 2008. The difference between the offered and the actual purchase price is 20%.
Comment » | Bulgaria, Property