Bulgaria Real Estate Sector to Meet European Standards
22 October 2008
In the next six months, unified European standards, regulating requirements towards real estate agencies, are going to be adopted in Bulgaria, according to Maya Staneva, Executive Director of the Bulgarian Institute for Standardization. Read the rest of this entry »
Sofia City Council Moves to Provide Wireless Internet in Parks
23 October 2008, Thursday
The Sofia City Council allocated Thursday BGN 180 000 for the setting up of a wireless Internet system in the parks of the Bulgarian capital.
Apartment Prices in Bulgaria Up by 3% in Third Quarter of 2008
23 October 2008, Thursday Source: Novinite.com
he average apartment prices in Bulgaria grew by 3% in the third quarter of 2008 compared to the second quarter of the year, according to data from the National Statistical Institute released Thursday, which excludes property in newly constructed buildings.
Original article by: 13:29 Tue 21 Oct 2008 – Nick Iliev
Land plots in resorts or near big cities have witnessed the sharpest decline of over 28 per cent as the drastic decrease in demand has burst the bubble of their artificially inflated prices, Iskrov said.
Land plots in resorts or near big cities have witnessed the sharpest decline of over 28 per cent as the drastic decrease in demand has burst the bubble of their artificially inflated prices, Iskrov said.
The Bulgarian real estate market has enjoyed years of gradual growth, with prices constantly being on the upturn providing a healthy climate for the sector. These were the days of predictability and affluence. Not anymore, being on the outskirts of the hurricane of financial trubulence slowly approaching the country from the West, prices have taken on a sharp decline, as offers on the leading property websites in the country show.
Real estate market, Bulgaria, 1990. The idea of a decent dwelling equals to a new panel block of flats long-awaited to become suitable to live in. The space around the block provides vast green areas.
Eighteen years later the model shifted to a gated community of small blocks of flats located in a prime capital neighborhood. The dream home is associated with easy access to major transport thoroughfares, security, maintenance and property management, cleaning services, dinner and babysitter on order and gym under the building.
The International Herald Tribune
SOFIA: Politics is played to the death in Bulgaria, where the lives of politicians can be as cheap as spent bullets and murky business groups wage a murderous struggle for their cut of everything from real estate deals to millions in European aid.
During a furious political season last year, the home of the chairwoman of a municipal electoral committee was set on fire and the garages of mayors were firebombed. The mayor of a golf resort town in central Bulgaria was shot and killed with seven bullets – the same number that killed the wealthy city council chairman in the outwardly idyllic Black Sea port of Nessebar.
“Other countries have the mafia,” said Atanas Atanasov, a member of Parliament and a former counterintelligence chief who is a magnet for leaked documents exposing corruption. “In Bulgaria, the mafia has the country.”
By almost any measure, Bulgaria is considered the most corrupt country in the 27-member European Union. Since it joined last year, it has emerged as a cautionary tale for Western nations confronting the stark reality and heavy costs of drawing fragile post-Communist nations into their orbit, away from the influence of Russia.
The United States helped Bulgaria into NATO, has rotated troops through for joint exercises since 2004 and has tried to encourage commerce, education and democracy. It has just announced that it will invest more than $90 million in the next two to three years in facilities and equipment for joint military exercises in Bulgaria.
You can see the full article at the IHT site
Tags: IHT, Bulgaria, corruption, politics
Global Property Guide
As financial markets tumble, the world’s housing markets have continued to slide during the year to end-Q2 2008.
Inflation-adjusted house prices fell in 21 out of the 33 countries for which there is up-to-date published data.
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 = more than 1 percentage point increase in house price change = less than 1 percentage point decrease in house price change = more than 1 percentage point decrease in house price changecompared to same period of last year *corrected Source: Various series, data descriptions and sources here |
The Baltics, the US, the UK and Ireland led the global decline during the year to end-Q2 2008, the latest date for which comprehensive global statistics are available.
The biggest house price declines took place in Latvia, previously a leader of the global house price boom. House prices in Riga have fallen by 21.23% in nominal terms during the year to end-Q2 2008, and 33.08% in real terms.
Prices in Estonia’s Tallinn fell during the year by 11.02% in nominal terms, and 14.06% in real terms.
Quarterly data suggests that things are getting worse, with declines in inflation-adjusted house prices over the quarter in all except 9 of the 33 countries tracked. Latvia’s Riga saw the largest quarterly decline during Q2 of 2008, with average dwelling prices falling 5.20% in nominal terms, and 8.16% in real terms.
While quarterly data are subject to seasonal variations and are thus less reliable, the slide suggests that the situation is worsening.
Since last year, there has been a dramatic turn-around in the world’s housing markets. Only 5 countries out of 33, at this stage last year, had seen y-o-y declines in house prices in real terms. This year’s total is 21.
Even in countries which have continued to record house prices rises over the past year such as China (Shanghai was up 36.32% y-o-y in nominal terms at the end of Q2 2008, 27.28% in inflation-adjusted terms), transaction volumes have fallen sharply, suggesting that buyers are now nervous.
While property markets in some regions such as the Middle East apparently remain in boom, it is hard to confirm this by reliable data. With the exception of Israel, none of Middle East’s property registries, statistical institutes or central banks publish good data on housing markets.
A final thought: It seems interesting that Slovakia’s house prices are still accelerating, having risen 32.20% this year (a rise of 25.57% in inflation-adjusted terms), as against a rise of 20.47% y-o-y to end-Q2 2007 (a rise of 17.56% in inflation-adjusted terms).
Clearly, the boom in Eastern Europe is not entirely finished. There have also been strong price increases in Monaco, Montenegro and Albania, although no official house price statistics are available.
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| = more than 1 percentage point increase in house price change = less than 1 percentage point decrease in house price change = more than 1 percentage point decrease in house price change compared to same period of last year *corrected Source: Various series, data descriptions and sources here |
The efforts to rescue the world’s housing markets are becoming increasingly global.
In the US, the authorities are seeking a US$700 billion “mother of all bailouts” package to purchase almost all of the country’s bad mortgage debt in an effort to unfreeze the nation’s credit markets.
In the year to end-Q2 2008, house prices in major US cities fell 15.4% (18.9% in real terms) from a year earlier, according to the Case-Shiller house price index. It was the sixth consecutive quarter that the house price index dropped year-on-year.
In the UK, the stamp duty exemption has been raised to £175,000 from £125,000 for houses purchased from September 2008 to September 2009. The government also unveiled a £1 billion package to assist first time home buyers and households struggling with their mortgage payments. In Sept. 2007 Northern Rock, one of UK’s largest lenders was bailed by the Bank of England.
In the year to end-Q2 2008, house prices in the UK fell 6.33% (9.77% in real terms) from a year earlier, according to Nationwide.
In Spain, the government released a €3bn rescue package. Certain real estate investment companies were given tax breaks to rent out unsold new homes for a fixed period.
In the year to end-Q2 2008, house prices in Spain rose 2.00% (a fall of 2.49% in real terms) from a year earlier, according to official statistics (which are widely believed to understate the problem).
In Ireland, the 2009 budget will include a “stimulus package” providing assistance to first-time homebuyers.
During the year to end-Q2 2008, house prices in Ireland fell 9.65% (13.92% in real terms), according to official statistics.
In South Korea, the government is set for tax breaks and easing restrictions on construction.
In the year to end-Q2 2008, house prices in South Korea rose 4.94% (a fall of 0.88% in real terms), according to official statistics.
Thailand and Indonesia are mulling the relaxation of foreign ownership limits to lift their housing markets.
During the year to end-Q2 2008, house prices in Indonesia rose 5.60% (a fall of 4.18% in real terms), according to official statistics.
Source: Global Property Guide
If rental yields are high, does it mean that it is a good investment option and I should invest immediately?
Well… no. We present gross yields and not net yields. From the gross yields, you still have to deduct taxes, maintenance fees and other costs. You should also compare the gross yields with current bank interest rates, inflation rate and the risks you are taking in investing.
The rental returns on owning property in different countries varies greatly. For instance in Europe, in early 2007, the range was from around 14.13% in Moldova’s capital Chisinau, to 2.43% in Monaco. The trend had been for rental income returns to fall, because rents are not keeping pace with prices anywhere in Europe. As 2007 dawns, rental returns are lower in most locations than they have been for 20 or more years.
To some extent rental returns appear to correlate with risk. Most of Europe’s ‘high yielding’ countries are in the East. Apartments in four Eastern European capitals earn above 10% rental returns: Chisinau, Moldova (14.13%); Warsaw, Poland (13.28%); Sofia, Bulgaria (10.56%); and Bratislava, Slovakia (10.06%). The higher risks of the East may be a factor in these returns (high corruption, political risks).
In some markets such as the Caribbean and the Pacific, most rents are seasonal. When the developed world is experiencing harsh winters, its wealthier citizens escape to sandy white beaches in the tropics. This leads to unexceptionally high demand during peak seasons and virtually zero occupancy during lean seasons.
For these places, we are moving away entirely from using seasonal rentals, as we find the results unreliable. For this and other reasons, the countries for which we have price data don’t always overlap with rental income data countries.
Source: Global Property Guide
What is the future of the panel housing market, you provide easy financing for their purchase and what is the attitude of banks to this type of housing? These were some of the issues that participants in the panel discussion devoted to the housing market in Bulgaria, commented during the conference on real estates BalRec – Bulgaria, which is taking place today with media partnership of Investor.bg.
Reason for the discussions was information that some banks have stopped granting mortgage loans for the purchase of panel apartments.
Martin Gikov team leader of real estate financing at UniCredit Bulbank, said UniCredit continues to grant credits for panel apartments. The credit applications are assessed more carefully compared to before, as with other properties.
“The question is what is the life of a housing panel,” commented Ilian Nikolov, regional director of RE / MAX Bulgaria. “This is almost a temporary building, but a building, which as time passes and the older it gets, the more it will fall apart. According to him it is natural banks to be more cautious about lending for the purchase of such property.
“Banks are always looking with a different eye of panelkite” said Tihomir Toshev, executive director of credit consultant Credit Center. “Even up to date when the market grew, they were more cautious.
He is of the opinion that there will be mortgage financing in the future of panel homes, but requirements for own funding will become higher. Estimates are that banks will require buyers of panel homes to have between 30 and 50 percent equity.
“A panel housing market will always exist“, says Katia Price, managing partner and executive director of Address Real Estate. “ Although they had reached prices that do not meet their quality up till now, the market will now drive them down and they will become available for people with lower margins, which can finance them themselves.
From: Angel Milev
angel@investor.bg
Source: Investor.bg
Mall Sofia has changed ownership Source:www.imoti.net
The German company “Degi Deutsche Gesellschaft fuer Immobilienfonds” is the new owner of the commercial complex type “mall” – “Mall of Sofia.
The Commission for Protection of Competition has approved the transaction, which is the second resale of Mall of Sofia.
The Germans also wanted to acquire the other large mall in the capital – “City Center Sofia”, but where not sucessfull.
For the “City Center Sofia”, with an achieved yield gained of 7.1 percent,a better offer was given by the American “Haytman”. For only 101 million USD in this lack of funds on the financial markets, they made a better offer and beat the Germans in the bid.
A look back to the short history of Sofia shopping malls shows that the initial investors included (IT) “International Theatres” – with half the investment and Israeli companies “Ocif” and “Aviv” – with a quarter of the capital.
In 2006 throught two transactions the property was acqired by the Irish investment fund “Quinlan Private” and “General Electric”.
And after just two years of ownership the ownership of the Sofia shopping malls went into the hands of new owners.
Source: imoti.net
Source: imoti.net
Investors have withdrawn from U.S. mutual funds in September record 72 U.S. dollars billion, rputting them in bank deposits insured by the authorities in view of the deepening financial crisis, announced the agency Blumberg.
According to TrimTabs Investment Research, Investor withdrew 43.5 U.S. dollars billion from stock funds and 28.8 U.S. dollars billion of collective investment schemes to invest in bonds.
These are money funds, which invest in shares not only the U.S. but worldwide, including Bulgaria.
The withdrawal of funds continue during the second week of October. Until Oct. 3 of them 49.3 U.S. dollars billion was directed to banks.
Investors are also withdrawing from contractual and mixed funds 8.8 U.S. dollars billion and 4.1 U.S. dollars billion.
But TrimTabs calms that investors who continue to invest in Exchange-Traded Funds, which invest in U.S. companies. But these operations are 4 times less than a week ago – from 15.1 U.S. dollars billion to only $ 4 billion
According to Morningstar Inc., The five leading U.S. diversified funds, including Fidelity Investments and Vanguard Group Inc., For 9 months have reported losses of 28 percent.
Meanwhile, after a brief recovery indices of the Bulgarian Stock Exchange (BSE) is thrown down again last week session.
SOFIX lost 5.63 percent to 602.82 points. “Diary 20″ dropped by just over 5 percent to 78.69 points. All other indicators also are red.
The reason is another failure of the international stock markets, after the panic and mistrust among investors again took top in U.S. markets.
Source: imoti.net
Sofia City Centre shopping mall is a prime indicator that the time has come when large projects are gagging to be sold. The mall recently went for 101.5 million euro to Heitman European Property Partners III. Equest Balkan Properties, the previous owner and operator of the site, bought the mall two years ago for 94 million euro.
The meltdown of financial markets worldwide is reaching morbid proportions and real estate investors are facing a race against time to avoid being embroiled in the collapse. Realtors are eager to sell every large site, office or trade facility that they have available. The current trend is not to “cry wolf” and raise general alarm, but sell as fast as possible every major project, brokers have told Bulgarian-language Standart daily on October 2 2008.
The goal is to repay the money as quickly as possible, in cash, as it is unclear yet which way the Bulgarian real estate market will swing. However, the spectre of financial disaster in US real estate market is making local investors and developers nervous and impatient, and they are looking to offload their investments immediately.
Those with cash will be able in two or three years’ time to go shopping in Bulgaria at their leisure, buy great properties cheaply as, by then, there will be a surplus of real estate in the country ripe for the taking. This trend has been observed in the larger holiday resorts, the so-called PUDs or Planned Utility Developments - gated residential areas with their own recreational facilities, as explained by Luchezar Iskrenov, Head of the National Committee for Real Estate told Standard.
In the past few months the demand for such projects has dropped significantly. Developers in turn are eager to offload and sell at a much lower price entire condominiums, rather than individual units at a proportionally higher price. This is because developers are eager for a return on investments and, in light of the impending financial meltdown, they want to transform those projects into liquid cash as soon as possible, Iskrenov added.
Sofia City Centre shopping mall is a prime indicator that the time has come when large projects are gagging to be sold. The mall recently went for 101.5 million euro to Heitman European Property Partners III. Equest Balkan Properties, the previous owner and operator of the site, bought the mall two years ago for 94 million euro.
The profit – a meagre 7.5 million euro – is not the kind of return one would expect from such a large site, according to the country’s financial experts. And the trend for the future is that such large projects are likely to change hands several more times.
Globally, such malls can be resold up to five or six times before they are purchased by a firm which will finally take control and manage them permanently. Those sorts of deals are not unlike how family homes or apartments change hands. These large deals involve huge sums of money, and are brokered and managed by agencies who operate with VIP clients under an cloak of secrecy.
Source: PROPERTYWISE.COM
