In 2015 year there will be a growth in the purchases and sells and rising of the real estate prices, which is due to the lack of quality construction.
More and more Bulgarians again are making views for buying a house or apartment. This happens after the fall of the property prices and few difficult years for the real estate market.
In 2014 year this trend seems to be disappearing and the theme about the fall of the property price is no longer actual. The turmoil in the bank system this year made the people to question whether it is more profitable invest their money in real estate.
According the statistics and the observations of our agency BiB Group and many other real estate experts, in 2015 there will be an increase in the prices and in the demand for buying a home.
An important element of the new market – the confidence in the real estate market is returning. More and more buyers are looking to buy a property with the idea that it is returnable investment.
Those people understand that putting their money only in deposits in bank is not the best solution. This understanding matches a very favorable moment the development of the real estate market, because the prices at this moment can be compared to those before 10 years ago, which makes them very attractive.
The better conditions for housing loan by the banks are additional factor.
We expect that in 2015 this trend will continue to grow as the demand the large cities will continue to grow.
However, the proposed properties will become less due to the small volume of new construction.
Our agency BiB Group believes that in the current 2015 year the demand will be directed to apartments in the large cities and houses close the large cities.
The purchases of real estate will be both from people looking to buy their first home and people willing to invest – a trend which began to develop in 2014 and will continue in the next years.
If we look at the properties on the market we will see that the greatest supply is for newly built buildings, but in the larger cities it is limited and makes a deficit for quality dwellings.
It is important to note that many Bulgarians are to target the acquisition of real estate in a ski resort or sea resort. This process began in 2014 year and continues thanks to the low attractive prices.
All the data show that in 2015 the different segments of the real estate market will be driven mainly by Bulgarian buyers, which were previously dominated by foreign buyers.
The statistics from the sales shows that 70% from the deals are for one bedroom and two bedroom apartments.
The real estate market is stable and traditionally the largest volume of sales was observed in the capital and in other large cities – Varna, Plovdiv, Burgas and other.
The increase of the prices continues, due to the increase in the demand, especially in newly built dwellings which led to the high prices in the recent years.
In 2015 the most searched properties are going to the one bedroom and two bedroom apartments. Important element in choice of home is the communicative location, which makes it good both for living and for giving for rent.
Credit growth
In 2014 there is a growth in the number of housing loans, due to the lower interest rate and the more favorable conditions offered by the banks. The demand for credits will continue in this year as more and more people feel more confident and financially stable.
At the moment it is difficult to predict whether there will be further interest rate cuts, as it influences by many factor and is hard to predict.
Our agency believes that in the current 2015 the mortgage interest rates may fall between 0,25 % and 1 %. The lower interest rates on deposits will lead to increase lending.
An influence on the real estate market have the changes in The consumer credit act, related to the mortgage loans. The competitions among, to attract more customers will cause reduction in the total price of the mortgage loans.
The lack of quality properties on the market continues
The real estate market in Bulgaria has many problems and they can not be quickly solved. The most obvious problem is the lack of quality offerings on the market, which is mainly dominated by old dwellings, that needs renovation are with irregular market price. Those offers overflow the market.
Rising of the prices and more transactions in 2015 year
In 2015 there will be a rise in the housing market, the deals will be done faster, the prices in the end of the year are expected to be 8% higher.
The activation of the market is mainly due to the lower interest rates on deposits and the loss of the confidence in the banks, although new shocks in this area aren’t expected. A good example for this is the situation with Central Cooperative Bank, which made many people invest in housing. As a result the demand is increasing and it is expected that in the next 12 months the transactions will increase with 15%.
As a result of this increased activity a larger scarcity of quality construction is expected, which will continue for several years until sufficient number of projects that meet customer demand appear.
At the moments it is not clear how the market of the properties on the sea resorts and mountain resorts will develop. Our agency indicates а decline in the demand in this type of properties in the past two years. More and more foreign citizens prefer to buy a home, suitable for whole year living.
There is a significant reduction of Russian buyers, due to the collapse of the ruble, as the buyers which haven`t give up on buying a property in Bulgaria had to cut their budged almost two times and reduce the size of the searched home.
There is a larger interest from buyers from Ukraine, despite what is happening in the country.
The problem with the real estate market can be solved in part by reducing the bureaucracy and prompting the business, related with investment for construction.
We believe that after the start of the program for free insulation with finance of 2 milliard levs, the old panel buildings will be repaired and refreshed, which will lead to increase of the sale on these properties.
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