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Bulgaria Real Estate Report Q3 2011
Business Monitor International, May 2011, Pages: 60
Bulgaria’s real estate sector has experienced a startling downward trend in recent years as the value of property has plummeted led by a dearth of demand. Early data from the first two months of 2011, however, suggest that a limited return is on the way. An average of 1,550 property auctions took place a month in January and February 2011, compared with a monthly average of 750 in 2010. The rise was due to increasing numbers of non-performing mortgage loans and old tenders without buyers in the country. This increase is expected to increase accessibility to lower-priced properties.
Although the real estate sector has experienced a small upturn in recent months, Bulgaria is unlikely to see substantial supply of new office, retail or industrial space over the coming years. The report prediction is that yields will remain broadly stable over the short term. The market has a long way to go to recover before BMI sees anything like the growth of the previous decade.
In terms of macroeconomics, the research’s view is that Bulgaria would experience a more robust return to economic growth has played out sooner than expected, with the country's economy hitting its stride in the final quarter of 2010, posting real year-on-year growth of 2.1%. However, a fundamental improvement in Bulgaria's economy has yet to be seen that would prompt BMI to upgrade the report forecasts and therefore the 2011 real GDP growth expectation is left virtually unchanged at 2.7%.
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