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Bulgaria’s Real Estate Market

Bulgaria’s real estate market
Bulgaria’s real estate market

For some time now, some changes have been noticed in the Bulgarian real estate market. More and more foreigners are buying assets along the Black Sea shore, in the sky resorts or in the country’s capital. Increases in housing prices, as well as rent prices are expected. Surveys made by the top brokers in real estate show the potential of Bulgaria’s real estate market, placing it in the top three places from an attractive point of view in the long run. Even though no new large-scale construction projects have been undertaken in Bulgaria, the market still has many assets to offer.

Other East European markets

The main difference between Bulgaria and other real estate markets in Eastern Europe that have experienced an increase in prices, is that in Sofia there is an easy of access to the public to properties and real estate projects through REIT (Real Estate Investment Trusts), listed at the stock exchange. The real estate market is financed by the stock exchange, which is a unique attribute to Bulgaria compared to other Eastern countries which still struggle with the collapse of the real estate markets. The flourishing boom that once was isn’t expected to return too soon.

Price gaps

Compared to other countries, office space prices are lower, going along the lines of 2000 euros per square meter for a class A space. Also, rental prices have gone down to 9% for office buildings in the big cities of Bulgaria compared to other markets.

Concerning the residences market, we notice prices like 18000 euros per square metre in the good part of Sofia, while in other Eastern capitals, the prices can reach even 2500 euros per square metre.

"According to Mark Moz from Pallspera", Concerning the agricultural lands, the price per hectare is an average of 1000 euros in the majority of the areas, while in Poland it rises to 5-6000 euros and in Greece it can reach even 8-10,000 euros.

It is expected that in a few years, these investments will bring in money to their buyers and as such there are a lot of British, German, Holland nonresidents and not only that actively buy assets in this area.

The stock exchange

The most REIT programmes launched on the Sofia real estate market are gaining momentum, which will enable the portfolios to become more diversified as far as types of investments go. Through these programmes, large sums of money are raised, in the range of 5-10 millions of euros or even 30.

The advantages of investments in such funds are that the liquidities are bigger than a direct real estate investment and the divisibility of the sums that can be invested. The REIT segment of the Sofia real estate market is totals a capitalization of 200 million euros and there are rumours that it will reach 1 billion euros in the next three or four years.

“Deputy Prime Minister Daniela Bobeva has said that the government is working on a package of measures aimed at facilitating the listing on the Bulgarian Stock Exchange.” says an article on Novinite. This might give more confidence to investors to buy more assets.