«Now people understand what they wish to buy». Real estate prices have fallen in Bulgaria — many investors have emerged
Foreign real estate markets are literally frozen at the moment — lockdown introduced in many countries has paralyzed work of real estate companies. According to the employees of real estate agencies in Bulgaria, now the number of transactions for local residents has dropped to zero, and the prices have bottomed out. What will happen next? The international real estate platform Realting.com spoke with Dariya Borzova, Managing Director at OASIS Real Estate Agency.
«Right now the pricing is most adequate, and there is even a slight increase in prices»
— What factors are the changes in the real estate market in Bulgaria connected with? Is coronavirus the only reason or there are any other?
— Due to the difficult epidemiological situation in Bulgaria a lockdown has been introduced, and you cannot move from one region to another without any viable reason. Therefore, the number of apartment showings for locals has now dropped to zero, — said Dariya Borzova. — We have completed all possible transactions. Part of the processes had to be «frozen» due to the closure of borders. However, this does not mean that the work of all real estate agencies has stopped. For example, we are constantly receiving remote requests for the property purchase. Recently, such requests are characterized by a detailed and clear structure — customers know what they want. Taking into account all the requirements, we are looking for the desired property and conduct online showings for potential buyers from different countries.
All our present clients are investors who wish to keep part of their savings in «solid» assets. That is why people are getting more interested in properties with the possibility of payment by installments, especially with the first payment of 30-50% of the cost.
At the moment, we can say that the real estate market in Bulgaria has already reached its bottom, and recently we have seen a stable light increase in prices. At the same time, in my opinion, right now, pricing is most adequate — the value of each property is determined taking into account the demand and value of this property. Coronavirus has abolished idle curiosity — now there is only a clear and precise request.
Another interesting detail — there are much fewer requests for relocation to Bulgaria for permanent residence. More and more customers wish to buy real estate for their own summer vacation and renting it out for the rest of the year. Many people realize that such real estate is a profitable investment for the future, because we most likely won’t have a «season» this year. However, likewise as everywhere.
— How willingly do owners of real estate grant price concessions to customers? Is there any need to do this now, in your opinion?
— Secondary real estate market is, first of all, relations with people: the seller on the one hand — the buyer on the other hand. One wishes to sell more expensive, while the second — to buy cheaper. Earlier we had cases when the discount was granted by almost 15% of the value, and there were times when the amount of 100 euros became the cornerstone of negotiations. The task of a real estate agency in this situation is to strike a balance.
Now the real estate market favors the buyer with real money. A large number of properties for sale at discount prices, some owners are ready for fruitful negotiations. For example, an apartment with one bedroom and a living room in Sveti Vlas residential compound in Amphora with furniture and appliances is for sale for € 31.2 thousand. The property is located 70 meters from the sea. But if you wish an apartment with sea views, then there is an option in the Center of Nessebar for € 59.5 thousand.
— What would you suggest the buyer and seller of the property to do now?
— First of all, you need to decide: what is important for the client, — said Dariya Borzova. — If we are talking about economy class properties, then the seller’s only strategy is to lower the cost, and the buyer’s expectation and a response rate. The lower the cost is the better. In Bulgaria, real estate on the coast is bargained without a commission from the buyer, and this is beneficial for buyers. It is important to find an active and trustable real estate broker to assist you in time and go ahead with the purchase.
If we are talking about the market for middle class apartments, then the ratio of price and quality is important. For the seller, prices from competitors (offers from neighbors) are the additional point to cost factor to pay attention to. For both customers: the seller and the buyer, saving money and time, quality service and results are important.
As for the luxury real estate market, here everything is completely different. To sell luxury real estate, you should choose the right agency. The criterion may be the number of luxury properties in the agency’s portfolio and the number of transactions over the past few years.
«Most likely, some hotels won’t be open this year, and most agencies will freeze their operations»
— How are the things in the rental market? Were there any cases of price reductions?
— We are located in the city of Nessebar, which is the center of the tourist flow. The Old Town is under UNESCO protection, the resorts Sunny Beach, St. Vlas, Ravda, Elenite and others are located right there. Hoteliers are now preparing for the season, but with less enthusiasm than ever. And the likelihood that there will be no season is very high. However, the majority of apartment hotels do not wish any realignment to long-term rentals and there has never been much demand for this. I think that, most likely, some hotels and apart-hotels simply will not open their doors this season. But will do open in the following one.
— Is it possible to make any forecasts regarding the real estate market in Bulgaria for the next six months or a year?
— We are too dependent on lockdown to be able to make any forecasts, — Dariya explained. — Yes, we restructured our work, because dealing with deferred demand for real estate. Yes, there are customers who bought, buy and will buy remotely. But what to do with those who wish to buy, visit, touch, sit for a while in the apartment before buying it? And there are many of them in the market. That is why many real estate agencies in Bulgaria will have to freeze their activities for the time being. And when the «defrosting» phase occurs is also unclear. The real estate market is inherently effortless and even after the lockdown is lifted, it is unlikely that people will first run to buy apartments or houses — time must pass. For real estate professionals this time will be difficult.
— How are the things now in Bulgaria, in general, in connection with the coronavirus? How do locals behave? What restrictions are introduced in your country to all citizens?
— In Bulgaria, it has been a month since the lockdown goes, an emergency has been declared. Movement around the country is restricted; government agencies operate in a truncated mode. Schools and kindergartens are closed — all are transferred to distance education. All grocery stores work on schedule from 8 am to 8 pm, but there is no any shortage of products, everything is in excess. There are no queues at the cash desks.
In a large supermarket at the same time can be no more than 30 people and everyone must keep a 2 —meter distance. For all people, the disinfection of hands, handles of baskets and prams is mandatory, wearing of masks and gloves is mandatory.
Notary offices operate — one notary on duty per 50,000 people.
Banks operate, restrictions on entry to the bank — depending on the size of the premises, the number of allowed visitors varies. It is forbidden to walk in the park, restaurants and cafes are closed. You can only order food by home delivery.
Bulgarians are too disciplined; they do not go out for every little thing. All these measures have led to the fact that more than a month after the first cases of infection in our country were reported, there were only 600 diseased.
In general, the Bulgarians have a very philosophical life approach. We know that «this will also pass away,» and therefore humbly accept all restrictions introduced by the public emergency and wait when it will be finished.
Фото из инстаграма мэра г. Бургаса. Надпись: «И это пройдет»
Пляж города Несебр, апрель 2020
Photo: OASIS REA