http://enhr2006-ljubljana.uirs.si/publish/W01_Tsenkova.pdf2006QUOTE
The housing surplus is in the range of
12-14 percent in most countries with Albania (7%) and Montenegro (24%) being the two extreme
situations. In addition to housing surplus, most of the countries have high vacancy rates--as high
as 24 percent in Bulgaria and between 10-14 percent in most of the other countries—which
demonstrates inefficient use of the housing stock.
The distribution of the housing stock by tenure category is characterized by a reduced share of
public housing stock and a predominance of owner occupied housing. In most of the countries
across the region, owner occupation exceeds 90 percent, which is well above the 60 percent
average in the EU.
Despite the economic and social hardships, most households in South East
Europe have mortgage free housing. In some buoyant markets this translates into substantial
wealth 10-12 times the average annual household income.
Notwithstanding preferences for
homeownership, most households in South East Europe overwhelmingly do not have the income
and savings to purchase a home. Low wages and employment uncertainty coupled with escalating
housing costs and mortgage rates have reduced effective housing demand.
http://www.ucalgary.ca/~tsenkova/projects/hpamp/hmarket.pdfQUOTE
Besides the low level of housing market activity, there has been an even lower
level of mortgage finance in most reforming socialist economies.
http://www.unece.org/hlm/prgm/cph/countrie...apter%20III.pdf(Study publ. date:
1994)
QUOTE
It must be Underlined that Bulgaria's current Dwelling stock can largely meet future demand. The quality and quantity of future housing are crucially dependent on the way in which present stock is preserved.
The available statistical data indicate that existing dwelling stock is new, of reasonably high standard and has acceptable amenities.
have a look at the trend since 1994.
http://www.nsi.bg/Population_e/Population_e.htmQUOTE
The natural increase rate (difference between births and deaths per 1 000 persons of the average annual population) is minus 5.1 in 2006
QUOTE
Bulgaria's population has dropped by 1 million to 7.7 million since the end of communist rule in 1989, a nearly catastrophic decrease in such a small country.
The Balkan state, which joined the European Union in January, has the lowest population growth rate in the 27-nation bloc, according to figures released by the National Statistics Institute on Friday.
If the trend of emigration and a high mortality rate continues, Bulgaria could lose a third of its population in a few decades' time, experts said. According to an analysis by the Washington D.C.-based Population Reference Bureau, published earlier this year, Bulgaria's population will decline by 34 percent from 2005 to 2050, falling to 5 million people.
Despite a steady economic growth of more than 5 percent in the last years, living standards in Bulgaria remain low. The average monthly salary is the equivalent of EUR180 (US$240), and 9 percent of the work force is unemployed, prompting many to seek jobs in other European Union countries.
The country's natural growth rate - the difference between the number of births and the number of deaths per 1,000 annually - stood at minus 5.1 per 1,000 in 2006, the lowest in Europe.
Bulgaria's birth rate decreased from 12.1 per 1,000 in 1990 to 9.6 in the same year - comparable to the rate in Greece, Hungary and Italy. But the mortality rate stood far above the European average at 14.7 per 1,000 in 2006, compared to 8.4 in France and 6.6 in Ireland.
Some 113,438 deaths were recorded in 2006, compared to only 73,978 births.
The current life expectancy is approximately 69 years for men and 76 for women, while the average age of the population stood at 41.4 years. - Pravda.ru
http://www.ired.com/news/mkt/bulgaria-2004.htmQUOTE
Two very powerful rumors fire up the market. First, Bulgarians are made to believe that by 2007, the presumed date of official entry into European Union, real estate prices should match those in Central Europe, e.g. Hungary, Czech Republic or Poland. Following this rumor, which has no real foundation whatsoever, prices in Sofia should double or even go higher in the next two, two and a half years. Even if such rumor has no economic foundation, the very fact that buyers believe in it means they see the current price levels still as good deal. Second, private banks believe, also without any reason, that 2007 will open the internal market for new competitors from EU. They will offer mortgage loans at 3-4% instead of contemporary 8-9%. For them it's "now or never" to fish for homebuyers.
These two rumors nourish each other. The higher prices go, the lower mortgage rates fall. The lower the rates are, the more potential buyers go to market. The higher the demand, the higher prices go. The higher the prices, the more people believe in these two rumors. The result is almost doubling of the prices in Sofia and Varna since last September. People prefer paying $500/sq.m now even with higher mortgage rate than wait until 2007 and pay $1,500/sq.m as rumors make them believe. Some banks have announced they won't condition the loans upon the household financial situation proof. Meaning people with ability to pay several monthly payments will get credits that ultimately will turn to be bad. Whether these credits are "good" or not good enough will show up within 1-2 years. Perhaps the general plan is to sell the house or apartments before the buyer becomes insolvent benefiting from the higher price. The last buyer will get the hot potato, which will occur when the market in mid-term starts correcting. We can expect this to happen within 3-4 years, maybe even earlier. What we have just described here isn't an illegal financial scheme, but its results will look like the NYSE crash after February-March 2000. But for the next year, perhaps two, the market will keep current direction, although it isn't sure whether it could keep the present pace of development.
http://www.novinite.com/view_news.php?id=90141QUOTE
Lending Growth in Bulgaria Hits 20% in Jan m/m
7 February 2008, Thursday
Domestic credits growth has hit a new record in January as compared to the previous month, local credit consultants said.
Data of Credit Center shows that the average size of the credits drawn out in January 2008 were worth EUR 46,800, marking a 20% increase over December 2007.
Mortgage credits drawn out in euros continue to form the biggest chunk of the loans, accounting for 78% of the total in January.
Mortgage credits with maturity of up to ten years are becoming less popular and account for just 10.63% of all loans in January, Credit Center said.
At the top end of the ranking are mortgage loans with maturity of 20 to 25 years and an average monthly instalment of BGN 700-800. These account for 31.9% of the total loans in January.
Half of Bulgarian mortgage loans borrowers are aged between 25 and 35, making this group of the population the most active users of the banking service.
Experts partly attribute the growth in lending to the rise in households' incomes, more than 40% of which grew from BGN 750 to BGN 1 500 on average in the first month of the year.
and then BG - The National Statistics Institute (NSI) :
http://www.seenews.com/LadgerLogic/downloa...;sFileUserName=QUOTE
03/12/07 HOUSEHOLDS INCOME Average per household 09/2007 - 655.02 Levs
http://propertywisebulgaria.com/article/bu...d_1460/catid_12QUOTE
Bulgaria has one of the world's highest rates of property ownership and tops the chart in Europe, an ERA Bulgaria study shows.
A total of 94 per cent of Bulgarians owned property in 2006, marking an increase of 3 per cent over the previous year, according to the study of international real estate broker network ERA that compared data from seventeen European countries.
Another 60 per cent of Bulgarians own more than one property.
Cyprus and Spain follow Bulgaria in ERA ranking with 85 per cent and 84 per cent of property ownership respectively. At the bottom of the table comes Switzerland with 37.2 per cent.
Europe's average rate of property ownership stands at 68.9 per cent
Teodora Dimitrova, head of the Bulgarian branch of ERA, commented that the high rate of property ownership is a powerful engine for the market, because it boosts the potential for selling and buying real estate.
http://www.betterhomes.bg/news224/ERA_ANNO...KET_REPORT.htmlQUOTE
HOMEOWNERSHIP
Bulgarians have one of the highest homeownership rates in the world (94%). This explains why, in the long-run, domestic demand will continue to be the major driver of overall residential property demand.
These people are simply, out of their mind…
Population of Republic of Bulgaria is shrinking, People are emigrating, dying, young family have no intention of bringing up more than one child, if they ever decide to engage in parenthood.
You guys can calculate what should be the average home price in Bulgaria; Fundamentals …
We have Supply and Demand, that drives every bit of the economy and as we can see demand and supply in the property market is quite an impressive driver for the economy as a whole.
The only real cause that would push people to buy new property is that old Communist style buildings will eventually have to be replaced.
There is a slight problem here - affordability.
So again Fundamentals are playing major role, demand and supply is restraint by availability of Money, or credit, and we also have to consider the condition of the properties.
I guess, these old type buildings have to be replaced by new dwellings in about 15 -20 years, but in ex-communist GDR experiences proved that these soviet concrete tower blocks, although ugly as a hell are quite well made and the technology used to produce these panels would last for years, also in most cases they are build to endure earthquakes.
The quality of new developments is below any requirements, control is low, and corruption is widespread.
Other publications also point how the market developed during the transition period and why household would prefer not to take extra risks of extra debt, Bulgarians simply are nation of savers.
Demand for Tourist investments is driven by returns, and it is clear now that the only place where you want to be in Bulgaria is the Commercial Property Sector where we have real shortage of quality office buildings and shopping centres.
Commercial buildings are scarce and the need for modern space have increased dramatically, but again we may experience overbuilding as with tourist developments and other type of properties.
We should definitely avoid being Left Holding the Bag, I don't want to continue with analyses where the market is driven by greed, and laundering money is normal practice…this is just my opinion and examination and I am not an expert.
