Property sales are expected to rise by up to 10%

The volume of home sales will grow by between 5% and 10% on an annual basis in 2013, Georgi Pavlov, Chief Executive of real estate broker Address, predicted. Average house prices are expected to remain roughly unchanged from the previous year or record a slight drop of 1-2%, similar to 2012's year-on-year decrease of 1-3%.

Pavlov said the rebound of the property market will be driven by lower interest rates on loans and better mortgage conditions offered by banks. The real estate expert pointed out that the average monthly payment on a home loan for a 60 sq m home and a repayment plan duration of 20 years is around 55% of the average salary in Bulgaria, whereas in 2006-08 it was over 100%. Ideally, the monthly instalment would be up to 30% of the debtor's income, although there are times when the amount is over 80%, according to Pavlov.

Electricity and central heating bills will join the neighbourhood, infrastructure and apartment type as main considerations for some of last year's house buyers, experts at Address predict. This is because, with time, high electricity and central heating bills actually make the house a more expensive proposition. Property experts have calculated that over a period of 25 years poor energy efficiency can incur additional overheads of more than BGN 40,000.

Between 15% and 20% of new house sales are driven by investment intentions, i.e. renting or selling the property with profit. As it turns out, about 20% of the sales are of properties put on the market by cash-strapped owners. At the same time, another 20% are sold with the idea of buying a bigger home at a better location, using borrowed money to make up for the price difference. As may be expected, two-bedroom apartments are most sought after.

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