Sofia Home Price Up, supply of holiday homes slow - Emerging Real Estate

For more information call 01924 364754

• Home
• News
• Blog
• Developments
• About
• Contact

Sofia Home Price Up, supply of holiday homes slow

2/26/2008

The largest increases were in the Ivan Vazov neighborhood with a hike in average asking sales prices of 33% in H2 2007, followed by Lozenets with a 29% increase. Doctor’s Garden remains the most expensive residential area with average asking sales prices in excess of 2,000 euro/sq m.

In the emerging neighborhoods Manastirski Livadi saw the largest increase with 25%, bringing the average asking sales price above 1,000 euro/sq m.

Gotse Delchev remains the most expensive of surveyed emerging areas with average prices of 1,144 euro/sq m, according to the Colliers report. In general, prices for properties under construction are approximately 20% lower than for finished products.

Rental rates also increased in the second half of 2007 but at a slower pace than sales prices. This means that the profitability of buy-to-let investments depends more on capital gains than rental income, said the Colliers report.

The second half of 2007 saw a slowdown in the supply of holiday homes. According to the latest research findings from Colliers International the increase in supply was 16% in H2 2007. This should be seen, however, in the context of an annual increase in supply (H2 2006 to H2 2007) of 170% in the mountain resorts and 65% in the coastal resorts respectively.

The global credit crisis resulted in the withdrawal of a core target market for holiday homes - the British and the Irish, compensated however by a new wave of Russian speaking individuals, Romanian and Scandinavian buyers. Demand is shifting towards high-end, finished properties with more rooms and a superior level of service.

The span of sales prices narrowed in the second half of 2007, with an average asking sales price of 1,210 - 1,420 euro/sq m in the mountain resorts.

The lowest average prices were seen in Pamporovo with the highest in Razlog.

The lowest average sales prices in the coastal resorts are in Kavarna (1,020 euro/sq m) with the highest in Sozopol (1,425 euro/sq m).

Colliers research further shows that the Elenite had the highest absorption rates in H2 2007 with 84%, while Ravda has seen the largest decrease in absorption - from 65% in H1 2007 to 41%.(Dnevnik)