Bulgaria's Real Estate Market Stabilizes, Credit Demand Up - Report

The Bulgarian real estate market is said to be stabilizing slowly but steadily. Photo by imotra.com

The number of new mortgage loans has gone tangibly up in Bulgaria in the second quarter of 2011 as the real estate market and banking activity are becoming more dynamic, according to a report.

Thus, the number of mortgage loans increased by 18% in Q2 compared with Q1, Credit Center, a Sofia-based consultancy, announced Wednesday.

At the same time, the average amount of the mortgage loans increased by EUR 2 200, its estimate shows, reaching EUR 40 595 vs. EUR 38 366 for the previous month, and has thus started to come closer to the pre-crisis level. 94% of the new property credits are in euro, and 6% are in Bulgarian levs.

"The reason for the growing amount of the mortgages is activeness in all segments of the property market. Even though the greatest demand is for two-room apartments worth between EUR 40 000 and EUR 60 000, the last quarter has seen demand in all price categories of the real estate market, and receiving credit is becoming easier and easier since in 90% of the deals, the buyer manages to negotiate a very good price for the respective property," explained Tihomir Toshev, CEO of Credit Center.

According to the consultancy, buyers for larger apartments of the type who drove the demand before the crisis have started to reemerge in the past month.

The Credit Center analysts say that the trends of the Bulgarian property market since the beginning of the year indicate that it has been growing slowly but steadily, strengthening the hopes that the market has already managed to reverse the drastic drop caused by the financial and economic crisis.

At the same time, the clients are said to be preserving their increased level of caution with new property deals.

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