Five Key Points Drawn From Major Property Report

Online, April 3, 2011 (Newswire.com) - Leading real estate agent, Bulgarian Properties, have released their Ten Year Review of the Bulgarian Residential Real Estate Market.

This is a report of major significance that has been extensively researched and compiled by Bulgarian Properties Chief Operations Manager, Polina Stoikova, using data from the National Statistical Institute (NSI) and the Registry Agency. Starting from the basis that the state controlled property sector was localised, undervalued and undeveloped through the 1990s - and that there was no effective real estate market in Bulgaria before the turn of the century - her analysis takes us through a wealth of detailed findings, highlighting both annual and cumulative changes in terms of price, value, number of deals, building permits issued and volume of residential housing stock across the country and the main cities of Sofia, Varna, Plovdiv and Burgas.

It's certainly impressive stuff ... but what does it all actually mean to the family thinking of buying a property and moving to Bulgaria? The report is wide-ranging, detailed, accurate and positive ... but what clues can today's buyer glean from the graphs and statistics?

Well, we've done the sifting and sorting for you and, here, we identify the five key points embedded within the report - and for added interest we've included the relevant comparison figures for the UK market.

1. Property prices have increased by around 65% over the last decade.
Despite the impact of the global recession and the crash in property markets around the world, headline rates of price increases per square metre in excess of 250% have been recorded but, after allowing for inflation and regional variations, the average price increase of some 65% represents a continuing and consistent upward swing ... (the comparable figure for the UK is 74%)

2. Average annual growth in residential property values has been around 12%
Even though there has been a fall in value of some 30% over the past couple of years, long term owners in the Bulgarian property market have seen a substantial increase in the value of their investment. The average annual appreciation of countrywide property values over the past ten years is registered as 11.65%, which shows that even after the major falls in the last two years, investing in a residential property has been a sound investment for the long term (the annual appreciation in UK residential property values is 16%)

3. The number of property sales has fallen by around 28% since 2005
Sales volume peaked in 2007 at just under 190,000, followed by two years of quite dramatic decreases. Taken over the five years for which statistics have been available, though, the number of concluded deals fell from 143,000 in 2005 to some 115,000 in 2010, an overall drop of around 28% ... (the equivalent figure for the UK fall in property sales is higher at 35%)

4. The number of new building permits issued is around 40% down since 2005
It is generally accepted in the field of contemporary research in the real estate sector that, like sales volume, the number of annually issued residential building permits gives an early indication of future trends and is a good forecasting tool for growth and development in the market ... (comparable fall of 38% was recorded in the UK market)

5. All the graphs and forecasts follow the same trend curve
Possibly the most important point that can be drawn from the report is that if all the graphs and trend curves were laid one on top of the other, there would be very little divergence from a single, median path. While this demonstrates that the report's data analysis is both accurate and consistent, it also paints a crystal clear picture of exactly what has been happening in the real estate sector during the past decade.

In its most simple form this can be mapped out as ...
A relatively stable market from 2000 to 2003, then a rapid growth until mid-2007 in terms of prices, building activity, market development and property values. The defining market characteristic of the following two years was a sharp decline in new housing stock, sales volume and prices down to, or even slightly below, 2004 levels. The pattern for mid-2009 through to the end of 2010 is that these decreases in the core factors of the market, while still in the negative zone are, in fact, levelling off and beginning to turn positive again.

The report concludes by forecasting that this trend of coming out of the negative and returning towards positive territory will result in new market growth by the end of 2011, provided that there is continuing economic stability and development in the country.

In summary then, owning property in Bulgaria over the past few years has been a good overall investment. While the global downturn and local price falls over the past couple of years have caused some difficulties and distortion in the market, it appears that this phase is now coming to an end, so the recommendation is that now might be the right time to consider - or reconsider - buying in Bulgaria.

References:
Property Report: www.BulgarianProperties.com website
Comparative UK data: www.Communities.gov.uk website
Discussion Forum: www.MovetoBG.com website and forum