This analysis is based on the statistical data from the National Statistical Institute and the increased number of clients’ requests on luxury properties in the first months of 2016 in comparison to the previous 2015.
The market of luxury properties is steadily growing. 10% growth of the number of luxury properties’ purchases mainly with investment purpose. The reasons for the market intensification are related to the low interest rates for mortgage loans and low interest rates for the bank deposits. People are looking for better rates of RoI and prefer to invest in properties.
The most preferred regions are Sofia – central part and southern part of the city, Mountain resorts and Spa regions. Exceeding tendency is that clients prefer to invest in newly completed projects and “green field” projects. They look for high quality properties and have high expectations about the architecture, design details and energy efficiency of the buildings – preferences that could be satisfied by newly constructed buildings.
Experts observe shorter terms of completion of the deals. The reason is that the clients have realistic idea of the price vs. quality of the offered properties and do not need to consider their purchase too long.
Data of the National Statistical Institute state that the prices of newly build properties rose with 5% at the end of 2015 in comparison to the beginning of 2015. The tendency is confirmed by the 4% increase of the permissions for new constructions and 12% increase of the started projects at the end of 2015.
At the moment the real estate prices, even those for luxury properties remain steady. However, based on the rise of the demand, we expect price growth till the end of 2016 and afterword. One of the reasons is that people start to prefer to invest in real estate and to favor rent income, which gives them 5 to 6 time’s higher liquidity of their savings. Now is the best time to invest in real estate in Bulgaria. We expect in the following months fresh financial resource to be invested in the real estate sector – purchase of properties and investments in new projects.
The profile of the client, who purchase luxury property is a manager on high position with two or three children, who look to increase the quality of life their family. The most attractive remain the properties in the city center of Sofia. This properties are high liquid, have stable and comparatively high RoI and are easy to be sold in short term.
New tendency is the increased interest in “green field” projects. Clients are willing to invest in developments in progress, due to the fact, that on the market remain only respectable and proved developers which offer high quality properties on reasonable prices.
In 2016 would be the best time to invest in real estate in Bulgaria – low interest rates, reasonable prices, supply-demand balance.