Банкеръ Weekly



The year 2004 can be described as crucial for the market of agricultural land in Bulgaria. Prices of housing and land in population centres registered a considerable growth which influenced also the price of agricultural plots of land. The pouring of funds under various European projects and agricultural programmes increased yields from land cultivation and ground rent. Peoples' willingness to acquire good land also increased. The most expensive and at the same time least traded plots of land are those near the well-known Bulgarian seaside and mountain resorts. Hence, the huge differences in prices - from BGN80/dca to over BGN9,500/dca, depending on the location and purposes for which the plots will be used. The average selling price of land for the entire 2004 was BGN306/dca, up from BGN145/dca in 2003, data of the System for Agricultural Market Information (SAMI) showed. Most of the deals, registered by land commissions, are for agricultural land. In just 2.3% of the cases a change of the use - for construction of commercial or housing facilities - was additionally demanded. A total of 486,000 hectares were sold out throughout the year. The development of the land market will continue in 2005. The funds from the European Union (EU) intended for investments in agriculture are to a large extend already known. Their amount is not very big, but they seem impressive on the background of the state of domestic economy and prices in the country. Considerable sums are expected to come to Bulgaria's agricultural sector in the 2007-2010 period and it appears those local entrepreneurs who are already buying land in certain regions, without making much stir, are men of vision. The Dobrich region is the leader regarding land sales last year. Wheat and other cereals are grown there, and the price of grain in 2004 was way above the average for the last five years. The average price of land around Dobrich is BGN188/dca and more than 60,000 dca have already changed hands. The Vidin region comes next with 3,394 deals and over 30,000 dca of land sold. Land is the cheapest in that region - only BGN88/dca on average. Turgovishte, Yambol, and Pleven follow, with average prices below and around BGN90/dca. Much less sales were registered in areas where the land is traded at over BGN300/dca. In the Kyustendil region, for instance only 900 dca were sold at BGN318/dca on average, and in the region of Pernik - only 430 dca changed their owners, at BGN285/dca on average. There are several reasons for the purchase of cheap land: for resale, for using credits and subsidies on the part of producers over the next years (according to unofficial data, a registered agricultural producer will get an annual subsidy of about BGN10,000 after Bulgaria joins the EU), or for land consolidation. Investment in land rose for the first time in 2004. Land was purchased by affluent people who want to acquire real estates, guided by the thought that their possessions will be getting more expensive, and not cheaper.An analysis of demanded and purchased land shows that luxuriant plots for agricultural production, mostly in Dobroudja and Trakiya, are sold best. So, if you have spare money - buy, experts advise. You will certainly benefit, although the time for getting the maximum from your investment may be late by five to ten years.

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