Банкеръ Weekly

Briefs

AGRICULTURAL LAND BECOMES ATTRACTIVE

Considerable changes can be noticed on the market of agricultural land over the last three months. The average price of BGN140/dca as per a research of November 2003 is not real any more. Presently, deals are effected at the level of BGN190-200/dca. The price, however, depends very much on the size of the plot of land, offered for sale. Small fields of 2-10 dca can still be had at BGN100-120/dca, depending on their quality and location. Prices of plots of 10-50 dca go up to BGN200-280-300/dca, brokers who have specialized in that trade say. When a real estate of over 50 dca is put up for sale, prices are even not quoted, and are negotiated directly with the buyer. According to some sources, a consolidated plot of 80-120 dca could be purchased at about BGN500/dca. There are two reasons for the market's differentiation according to prices, agricultural experts comment. The first one is connected with the appearance of serious investors, some of them foreigners, who are ready to buy plots which are currently cheap for them,use the European funds for growing orchards or vineyards on them, and sell them at a considerable profit in three or four years. For such a period an operation like that guarantees a profit of at least 300-400%, considering the subsidizing under the European Union's SAPARD Programme and the relatively lower interest on credits, allocated by the Agricultural State Fund. The second reason for the stir-up of the market is the increased number of Bulgarians who have occupied in an agricultural production of some kind and who need to increase their plots in order to improve efficiency. They usually buy smaller plots, but bordering on the land they already own. They pay lower prices and by the purchase consolidate the small and parcelled out fields, which have either not been tilled so far or have yielded trifling incomes. If interest towards agricultural land continues, we'll certainly witness new record high price levels in 2004. According to forecasts, the average price will be around BGN200/dca, and in some regions it is may even reach BGN350-400/dca for the purchase of plots over 100 dca. Big trade companies from the EU, mainly exporters of fresh fruit, vegetables, and processed agricultural products, are expected to increase their presence on the domestic land market. According to brokers, visits to Bulgaria on the part of representatives of such firms have become more frequent and they already have a real contribution to the deals in land.

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