Sofia Housing Market Shows Strong Signs of Recovery

The company's Operational Director, Polina Stoykova, quoted by the Bulgarian daily "Dnevnik," says data about deals concluded in January of 2011 shows this has been the strongest first month of the year in terms of sales in several years to pass.

The Director explains the common trend is for the sales to go down in the beginning of the year, adding the numbers are a good sign for the real estate market as a whole.

In January, buyers were mostly interested in one-bedroom apartments with a listing price of up to EUR 50 000; followed by two-bedroom units between EUR 75 000 and EUR 80 000, and by luxury apartments with prices between EUR 120 000 and EUR 300 000.

Considering the average income and the price reduction for housing units, apartments in Sofia are way more affordable compared to 5 years ago, according to Stoykova.

Data from the National Statistics Institute (NSI) shows that housing prices in the capital are at the 2005 level while the average income of 1 employee after inflation deduction is 65% higher compared to the same year.

In 2005, an individual was able to afford with their monthly income about 0.4 square meters of housing in Sofia while in 2010 this number is 0.5 square meters.

For example, a 70 square-meter apartment in 2010 could be paid off in 11 years or 132 monthly salaries. In 2005, these numbers have been 14.5 and 175 respectively; in 2000 – 9 end 107.

The lowest purchasing power was registered in 2008 – 0.3 square meters in 19.5 years or 233 monthly salaries.

Apartment prices in Sofia have fallen by nearly 33%, compared to their peak in 2008, according to NSI data, and 31%, according to Bulgarian Properties data. The reduction, however, is nearing 0 since the second half of 2010, meaning the real estate prices have already hit their bottom.

Stoykova's forecast is for a continuing strong interest on the part of the buyers in Sofia over the expected relocation, (triggered by better wages), of highly educated people and business people.

Tags: apartment, sales, real estate, housing, sofia, Bulgarian Properties, NSI, income, prices