See how managers of leading companies summed up the year to Economy.bg.
The past 2017 will be remembered as the most active and successful for real estate in 10 years, according to all of leading real estate companies representatives in Bulgaria. Who were the most active buyers and what trends were observed during the year?
See how managers from different real estate companies sum up the year to Economy.bg
Polina Stoykova, Executive Director of Bulgarian Properties:
From 2007-2008 we have not had such a positivism on the market
We will remember 2017 as the most successful for the property market in 10 years. From 2007-2008, we have not had such a positivism on the market, which apart from Sofia, was also present in the other big cities and partly in the holiday segment, and the main buyer in the whole country was the Bulgarian.
The strongest was the market in Sofia. Here values have risen between 10 and 15 percent and the average reached 1000 euros per square meter. The highest activity and the fastest growth in values were recorded from April to mid-July, after which there was a certain slowdown in the market, a slowdown in the growth rate of values.
A hit on the market this year was the new construction, with the best projects being sold out at an early stage of construction.
Good news came from holiday markets at sea and especially in ski resorts where sales grew at the fastest pace since mid-year and in Bansko increased by an impressive 30%. A great demand from Bulgarian buyers is in Borovets and Pamporovo, while Bansko remains the most international among the three resorts with a colorful picture of buyers' nationalities.
This was a trend we expected - the positive processes of big cities to move into the holiday segment due to the available, ready-to-use properties offered at tempting low values that literally anyone can afford.
Nevena Stoyanova, Managing Director of "Luximo":
2017 was an extremely successful year in the high-end real estate segment
2017 was an extremely successful year in the high real estate segment for Sofia and Varna. The new projects that came out on the market responded to the needs of the most demanding customers. They were redeemed at an early stage of construction.
Major trends distinguished 2017 from previous years: property searches in areas with proven cleaner air and environmental protection by buyers and sellers; looking for larger squares in apartments and houses with natural light; looking for properties in a secure environment with good maintenance and suitable neighbors.
Return of many wealthy Bulgarians, living abroad was the best thing had been happening in the past year, which as the real estate agent we first registered. The increased tourist interest in Sofia led to a fast pace of real estate transactions in the central parts of the capital. This factor, as well as the outsourcing of important companies in Sofia, favored the rise and rental market in the high segment.
Dobromir Ganev, Manager of Foros - National Real Estate Company:
2017 was one of the most successful of market development in the last decade
2017 was one of the most successful of market development in the last decade. Taking into account the official data on the transactions executed for Q1-Q3 2017. we can confirm this assessment. In a lot of big cities, real estate transactions continues risinig. Some people see a slowdown in this growth, but the market remains very dynamic. Good data on the country's main macro indicators, combined with the good development of companies and businesses, lead to the conclusion and this trend is logical. Solvency is high. It should be noted the high rate of construction of new buildings and the planned construction of a new building in the short term. Inevitably, this will affect the market.
The main groups of buyers are:
- young families getting their first home - find the right moment due to the excellent mortgage lending banks offers.
- migrants of young people in Sofia, Varna, Plovdiv and Bourgas, aiming to higher incomes and career development.
- young people working in Sofia and Plovdiv, with high incomes (IT specialists, engineers, developers).
- owners of successful small and medium-sized businesses intending to invest in real estate (investment or own-use) - shops, restaurants, offices.
- Bulgarians living and working abroad - an increasingly pronounced tendency to acquire property and invest their savings in Bulgaria.
- Bulgarian - individuals (small investors) intending to diversify their savings, including in the real estate market, especially after the CCB /Corporate Comercial Bank/ crisis.
- foreign citizens planning to acquire a second home on the Bulgarian Black Sea coast, winter resorts and other destinations.
- large investment companies aiming to acquire plots in the big cities - Sofia, Varna, Plovdiv, Burgas and to develop construction, mainly residential projects, a few of them - office buildings.
- industrial-manufacturing companies, logistics companies - acquire plots in order to build the necessary production facilities.
Strahil Ivanov, Executive Director of "Yavlena":
In 2017, buyers in Sofia searched for larger areas
In 2017, clients in Sofia searched for a larger areas, ie. over 150 sq.m. Parking has become one of the decisive factors for choosing a property and usually they choose one that has the opportunity to acquire one or two parking spaces.
Statistics in Yavlena show that most demanded purchase are 3-bedroom apartments, followed by 2-rooms and after that - 4-rooms in Sofia in 2016 and 2017. This is a contrast in the market, looking for mainly 2-room flats, followed by 1-room and then-3-room apartments five years ago
In the country and especially in the big cities - Plovdiv, Varna, Bourgas and Stara Zagora, the main demand is to satisfy real residential needs, while in Sofia a considerable part of the purchases of properties have an investment character.
Ralitsa Tsenova, Sales Director at "Home2U Real Estate":
The average value increase is between 8% and 12% for the year
We are going to send an intensive year to the real estate market in Bulgaria. The year in which properties kept the general upward trend, but as we expected, at a slower pace than in 2016 - the average annual price increase is between 8% and 12% for the year.
As steadily rising markets across the country outside the capital, Varna, Plovdiv and Bourgas were established, although the rise in values was more smooth and the end values of the price per m2 compared to the capital were lower on average by 200-250 E/m2
It is important to underline the fact that the value increasing is still not proportional to regions and types of construction – the incerasing prices of houses in the regions with developed infrastructure outstrip a less-favored areas and leading factor was the a metro station near the capital. As well as the new construction, overtakes the panel construction in value and preference.
Again the best-selling were the residential properties in particular - apartments. The percentage of dwellings purchases for long-term use relative to those for an investment is 65% to 35%. Mortgage-backed deals make up about 46%, compared to 64% for personal funded transactions.
About 47% of buyers in an investment plan are planning their long-term lease, while 25% are buying short-term rentals, most commonly through the recently-hosted Airbnb portal, while the remaining 28% invest in a real estate with speculative purpose .
In 2017, the number of house transactions continued to increase, with the average price of the sales varies between 220-320,000 euros during the year and the average sale time for one house was reduced to 5 months.
In the business segment, we saw remarkable upheaval, which is expressed in two indices:
- a record increase in the number of leased office space - 131,000 sq. m, which brought the market back to pre-crisis levels. Most of the office space was occupied during the construction
- a lot of business buildings started, which will grow the fund of the office space in the capital by a total of 100 000 sq.m for 2017. Concerned is the fact that 300,000 sq.m of office space is in the process of construction or reconstruction and their exposure to the market will lead to an inevitable decrease in the average rental value, which in 2017 was 13,5 E / m2 for office class A and B.
Large companies chose to build their own buildings and place their business there, releasing large areas in buildings that do not correspond to the latest trends and innovations, making them more slowly realizable and lowering dramatically their rental value. The most preferred offices remain in modern class A business buildings and close to infrastructure.
Though speculative rumors about the bubble in the property market, the facts speak of controlled and sustainable growth, driven by key factors such as population migration, globalization, growth in the economy, income growth and affordable lending, although our country is still on 28th place in Europe and the region on credit availability.
Yasna Bozhinova, marketing manager of Arco Real Estate:
2017 will be remembered as the most active real estate year since 2008
Most active buyers who bought a primary home, with about 60% of all using a mortgage loan were in 2017. These are people aged 25 to 48 years old. The most wanted were new buildings with an expected use permit in early 2018.
The most attractive demanding trend is expected to stay in the areas with infrastructure and metro built, in the next year. 2017 will be remembered as the most active and successful for real estate since 2008.
