Post by TheTravelBug on Mar 30, 2011 10:22:36 GMT
Sofia Echo: 20th March 2011
Prices of residential property in Bulgaria have surged by more than 200 per cent on average over the past 10 years, according to an analysis by Sofia-based real estate agency Bulgarian Properties, based on National Statistical Institute (NSI) and Registry Agency data.
"We witnessed a very dynamic decade for the Bulgarian property sector, which brought about a drastic surge in prices and in number of deals, as well as more dynamism to the building sector, followed by a steep contraction in the last two years," Polina Stoikova, chief operating officer at the agency, said.
Between 2000 and the third quarter of 2008, housing prices in Bulgarian regional centres had been rising rapidly before staging a sustained decline, producing an average growth of 201 per cent in the decade. The largest increase, of 330 per cent, was registered in the city of Silistra, followed by Turgovishte and Kurdjali with 310 per cent and 309 per cent, respectively. The significant surge was attributed to the fact that property prices in these cities were below average levels nationwide in 2000, at about 150 lv a sq m, compensating the low cost with a faster growth in prices in subsequent years to catch up with the average rates in the country.
Housing prices in the capital Sofia recorded a 171 per cent increase for 2000 to 2010, while the property market in Varna witnessed a 237 per cent growth.
Taking inflation into account, the accumulated real growth in housing prices in regional cities stood at 68 per cent on average in the country, with prices in Sofia and Varna increasing by 51 per cent and 88 per cent, respectively.
Between the third quarter of 2008, when housing prices reached their peak, and the last quarter of 2010, the market saw an average decline in costs of 33 per cent, with the average price for Sofia homes dropping by 36.6 per cent in the period.
The first two years of the past decade registered a negligible increase in housing prices. In 2003, the market saw the first double-digit annual rise in prices, which further advanced to 47 per cent the next year. In 2005, the growth was again considerable, but slowed down to 14.7 per cent in 2006. The price growth in 2007 and 2008 rose again to 28 per cent and 24 per cent, respectively, before witnessing a decline of 22 per cent in 2009 and 10 per cent in 2009 and 2010.
The accumulated real decline after adjustment for inflation between third quarter of 2008 and the last quarter of 2010 stood at 36.6 per cent, while the average annual rise of apartment prices in the country in the past 10 years made up 11 per cent.
Sales of residential property in 2010 were 45 per cent lower than the number of deals registers in 2007, according to Registry Agency figures. In 2008, housing estate sales declined by five per cent year-on-year, against an annual drop of 37 per cent in 2009 and seven per cent in 2010.
On one hand, the market witnessed a 45 per cent contraction in sales volumes against their peak levels in 2007 and an accumulated decrease in apartment prices of 36.6 per cent on the other. According to Stoikova, the data proves that deal volumes, not prices, are the first to respond to market developments. In 2011, the number of deals is expected to rebound, which will be a sign that the market has headed for recovery, she said.
The number of construction permits issued in Bulgaria dropped by 56 per cent in 2010 compared with 2007, NSI figures showed.
The peak 2007 in terms of housing permits granted by local authorities coincided with the period which saw the largest number of deals before they headed down the following year. In 2010, as many as 4891 building permits were issued, or about 24 per cent fewer than in 2009.
The number of residential units in the country rose by 2.26 per cent between 2004 and 2009, with cities registering an average rise of 3.94 per cent against a decline of 0.56 per cent in villages. In Sofia, the number of housing units rose by 2.59 per cent in the period.
The largest increase was registered in the municipality of Bourgas, of 24.49 per cent, because of overbuilding along the Black Sea coast, followed by the municipality of Varna with a 9.54 per cent surge in residential units.
Veliko Turnovo, Rousse, Plovdiv and Blagoevgrad were also among the municipalities to see a significant increase in the number of housing units.
Prices of residential property in Bulgaria have surged by more than 200 per cent on average over the past 10 years, according to an analysis by Sofia-based real estate agency Bulgarian Properties, based on National Statistical Institute (NSI) and Registry Agency data.
"We witnessed a very dynamic decade for the Bulgarian property sector, which brought about a drastic surge in prices and in number of deals, as well as more dynamism to the building sector, followed by a steep contraction in the last two years," Polina Stoikova, chief operating officer at the agency, said.
Between 2000 and the third quarter of 2008, housing prices in Bulgarian regional centres had been rising rapidly before staging a sustained decline, producing an average growth of 201 per cent in the decade. The largest increase, of 330 per cent, was registered in the city of Silistra, followed by Turgovishte and Kurdjali with 310 per cent and 309 per cent, respectively. The significant surge was attributed to the fact that property prices in these cities were below average levels nationwide in 2000, at about 150 lv a sq m, compensating the low cost with a faster growth in prices in subsequent years to catch up with the average rates in the country.
Housing prices in the capital Sofia recorded a 171 per cent increase for 2000 to 2010, while the property market in Varna witnessed a 237 per cent growth.
Taking inflation into account, the accumulated real growth in housing prices in regional cities stood at 68 per cent on average in the country, with prices in Sofia and Varna increasing by 51 per cent and 88 per cent, respectively.
Between the third quarter of 2008, when housing prices reached their peak, and the last quarter of 2010, the market saw an average decline in costs of 33 per cent, with the average price for Sofia homes dropping by 36.6 per cent in the period.
The first two years of the past decade registered a negligible increase in housing prices. In 2003, the market saw the first double-digit annual rise in prices, which further advanced to 47 per cent the next year. In 2005, the growth was again considerable, but slowed down to 14.7 per cent in 2006. The price growth in 2007 and 2008 rose again to 28 per cent and 24 per cent, respectively, before witnessing a decline of 22 per cent in 2009 and 10 per cent in 2009 and 2010.
The accumulated real decline after adjustment for inflation between third quarter of 2008 and the last quarter of 2010 stood at 36.6 per cent, while the average annual rise of apartment prices in the country in the past 10 years made up 11 per cent.
Sales of residential property in 2010 were 45 per cent lower than the number of deals registers in 2007, according to Registry Agency figures. In 2008, housing estate sales declined by five per cent year-on-year, against an annual drop of 37 per cent in 2009 and seven per cent in 2010.
On one hand, the market witnessed a 45 per cent contraction in sales volumes against their peak levels in 2007 and an accumulated decrease in apartment prices of 36.6 per cent on the other. According to Stoikova, the data proves that deal volumes, not prices, are the first to respond to market developments. In 2011, the number of deals is expected to rebound, which will be a sign that the market has headed for recovery, she said.
The number of construction permits issued in Bulgaria dropped by 56 per cent in 2010 compared with 2007, NSI figures showed.
The peak 2007 in terms of housing permits granted by local authorities coincided with the period which saw the largest number of deals before they headed down the following year. In 2010, as many as 4891 building permits were issued, or about 24 per cent fewer than in 2009.
The number of residential units in the country rose by 2.26 per cent between 2004 and 2009, with cities registering an average rise of 3.94 per cent against a decline of 0.56 per cent in villages. In Sofia, the number of housing units rose by 2.59 per cent in the period.
The largest increase was registered in the municipality of Bourgas, of 24.49 per cent, because of overbuilding along the Black Sea coast, followed by the municipality of Varna with a 9.54 per cent surge in residential units.
Veliko Turnovo, Rousse, Plovdiv and Blagoevgrad were also among the municipalities to see a significant increase in the number of housing units.