Rising inflation in Europe saves the property market in Bulgaria

Due to the inflation processes which can already be noticed in some European countries and outside the Old Continent, a great part of the savings will probably be directed to the property sector again. This forecast was made by Orlin Vladikov, Manager of a real estate agency, to BTA. Within a year, he expects increased interest on the part of foreigners towards the purchase of industrial properties, retail and logistics space in Bulgaria. They will be from Western Europe, the Middle East and Greece, and will benefit from the fair tax climate and could make substantial profits.

According to information of the Bulgarian National Bank (BNB), proceeds from the purchase of real estate properties in our country by foreigners are close to last year’s level, totalling €97.7 mln, compared to €98.7 mln for January-June 2010.

One more trend has been observed in Bulgaria over the last two years as well. About one in eight companies in the real estate sector have ceased operations. According to Vladikov, the number of property agencies has dropped from 4,500 to below 4,000. Other experts in the branch estimate that the number of companies which has ceased may be even higher. 

"Since the beginning of the crisis until now, for the last four years, the number of real estate agencies in Varna fell about threefold," Strahil Ivanov, CEO of the Yavlena real estate agency, told Klassa. The so-called random players are quitting the sector. Most often, these are companies that have worked with British clients and account for a very narrow segment of the real estate business, or are small firms, headed by former real estate agents. They have had ambitions to raise their personal incomes, without having sufficient capital at their disposal, or expertise or clients in order to achieve such a success.

Companies like this leave the market while the established ones continue their operations and this trend is good for the business. The most interesting fact, according to experts, is that the agencies that were operating in the 1990s on the property market hold very good positions at present, too. These companies have survived during the crisis and have even increased their level. At present, the number of transactions does not increase and together with this, prices have stayed almost unchanged, registering only a slight decline, according estimates of some of the survivors in the branch.

"At this stage, in quite an unstable situation, we are not expecting the number of agencies operating on the market to increase," Kaloyan Bogdanov, Marketing Manager of the Address real estate company, told Klassa.

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