The average 2003 increase of Bulgarian real estate prices is between 24 % and 28 %. The expectations are slowing down the tendency and keeping a moderate, but systematic pace of increase until year 2007, the tentative year scheduled for Bulgaria to join the European Union.
Local property market is experiencing an impressive revival and there are several factors that contribute to this:
- Mortgage lending potential - currently, mortgage loans are 5% of the total credit supply within the local banking sector. In developed credit markets, this rate is usually in the range of 15 - 20%.
- Increased foreign direct and indirect investment in Bulgarian real estate determined by:
- Bulgaria's expected EU membership perspective;
- Expanding tourist industry;
- Stable macroeconomic indicators:
- GDP annual growth of 4.5 % to 5%;
- Dropping unemployment rate: from over 16 % to under 13 % for the last 15 months;
- Improved credit rating – BBB-.
- Attractive Return on Investment rates in the real estate sector – on average 15 to 18 percent.
The market of Black Sea coastal real estate in Bulgaria has grown significantly since the beginning of year 2003. Sales prices of brand new income residential properties have increased almost twice in some areas compared to year 2002. Seafront real estate was on average 30% more expensive than water view locations. Bulgaria is still a popular holiday destination for lower income tourists, which is the main reason for higher demand for smaller and cheaper real estate.
Local market of residential properties in big cities along Black Sea coast has grown notably. During the last year demand was higher than supply, due on one hand to the increased supply of mortgage loans and on the other to consistent migration of workforce from inside the country to sea resorts and big coastal urban centers like Varna and Bourgas where more jobs are available. In 2003 the unemployment rate for the city of Varna was 5% in accordance with the NSI of Bulgaria. As a result, the price hike of residential property was almost 24% in Varna.
Plots of land were also attractive for investment purposes. In 2003 their prices had increased more than 30% on average compared to year 2002. Some beachfront parcels for development of leisure properties had reached EUR 35/sq.m. compared to similar properties sold at USD 15/sq.m. in 2002. In certain areas close to leading resorts like Albena, Golden Sands, Sunny Beach and others, prices had increased more than twice for the previous year and varied between EUR 35-55/sq.m.
During the first quarter of year 2004 the REMI index, reflecting real estate trends on the residential, business and land markets, has risen with 4.28 points, prodded by the rising prices at residential areas.
According to NSI of Bulgaria, the quarterly real estate prices growth rate is 12.5%. Yet, Sofia is the most expensive real estate market with 2.8% increase followed by the towns of Varna (23.7%), and Bourgas (16.8%).
Bulgarian Property
Bulgarian
Start > Pages > Resourse > Bulgaria Property Statistics Prices > 
