How many Bulgarian properties are actually selling and where? Quarter 2 2013 market analysis.

Bulgaria’s property Registry Agency has published new data showing the number of transfers in the first quarter of 2013. New Estate has analysed these to exclude transfers between shareholders, donations, freezing of property assets, movements between inheritors or other connected parties etc, thus filtering the figures show a true representation of actual property sales in the marketplace.

This data offers invaluable insight into the dynamics of the property market; it shows exactly how the regional areas driven by the separate international and domestic demands have reacted over recent years and throughout the seasons.

Below you will find New Estate’s general summary and the significant points in these trends relevant to all vendors listing their property with us:

Sofia, Varna and Bourgas:

The total number of sales in the three major markets decreased by 8.5% from 2011 to 2012, a total of 3,138 less sales were achieved year on year, totaling 34,330 in the most recent 12 months. It should be noted that the largest drop occurred in the second quarter of 2012 when the number of the sales was 3,434 less than the same quarter in 2011.

Whilst data on values (not available here) shows that nominal prices have only decreased since 2008, the prices look to be decreasing by less each year indicating a steadying of the decline and possibly a shift towards prices a plateauing. Yet, the volumes data here confirms that these lower prices result from fewer and fewer transactions as the market continues to shrink without any signs of slowing or growing. The reality is that with 8.5% less sales fewer property related businesses will be able to continue next year, those that do will on average have 8.5% less profit available and thus fewer resources to build, resell or market property.

Sofia:

Sofia is officially Europe’s 15^th largest city just after Milan, Munich and Prague with a population with 1,241,296 people (National Census 2012), there are 607,000 built homes and of these 76% are occupied (National Statistic Institute 2013). Yet in the entirety of 2012 saw just 18,166 sales of property, which equates to just 2.99% of total housing stock. This indicates a very small marketplace indeed, seemingly fewer and fewer buyers have the prerequisite motivation and finances to commit and buy.

Nessebar, Sunny Beach, St Vlas, Elenite & Ravda:

The municipality of Nessebar administers the entire region, the data from which proves to be the most dynamic for holiday properties in the whole of Bulgaria.

Fundamentally, we can actually see encouraging signs amongst these figures; overall a positive outlook with 1% increase of year on year volume of sales. Although no official data can confirm it, it is largely accepted that this is almost entirely due to the continued demand seen from Russia and the ex-soviet states.

However, although the volume of sales shows a marginal improvement the same cannot be said for the actual achievable prices. Sadly the prices look to be only lower than this time last year in all areas and at all levels of the market, possibly by 5-8%.

Season and Annual Trends:

Generally the market can be split into two key demands; domestic from native residential Bulgarians and international from ex-soviet states for holiday properties. We can see how the peaks and troughs of Sofia, Varna and Bourgas typically follow each other, although to different extents. Government policy shifts, unemployment, faith in the property market etc are just examples of major contributing factors that impact the upward and downward swings that are seen uniformly on a macro scale across the nation.

However, the international demand from Russia sees a more consistent pattern and it has no obvious relation to domestic influences; demand is entirely seasonal and sees peaks in the third quarter after as the hot summer season attracts buyers and drives sales. The coldest months of the year in quarter 1 see fewer buyers hurrying to complete on their summer holiday property purchase in time for the best weather.

New Estate finds this surprising as although we also typically find the peak of demand in quarter 3, we also find almost as much demand in quarter 1, however this is thought to be connected to marketing investment more than market trends.