Банкеръ Weekly

Briefs

LAND SALES ON THE DECREASE

Sales of agricultural land have fallen off in 2003, the latest research by the System for Agricultural Market Information (SAMI) showed. 32,000 deals were closed and 345,000 dka of land sold last year. For comparison, 594,000 dka were sold in 2001 and 355,000 dka - in 2002. The land supply to demand ratio has shrunk in the recent years. It was 2.8:1 in 2003, down from 10:1 in 1998. It means that owners of agricultural estates have been quitting the market. Fewer people are willing to sell at the current market prices. The average price of the land sold in 2003 amounts to BGN143/dka, compared to BGN141/dca in 2002. It was BGN141/dca in 2001, too, and BGN137/dca a year earlier.Taking into consideration the answers given by land owners, the price they would sell their estates is about twice the average price in the country. If it goes up to BGN280-300/dka, it might open the market and increase sales two or three times. However, the lack of financial resources of the potential buyers is an obstacle for this process, at least for the present. That's how leaseholders and farmers grow willing to buy land, but because of the lack of money the price of one decare goes down and land owners give up their plans to sell.In 2003, buyers wanted to acquire plots of land most frequently in order to use them for agricultural purposes. Demand for land needed for trade or construction of warehouses, buildings, filling stations, has fallen about three times. The number of this type of deals has only grown in Sofia.The biggest number of sales has been registered in the regions of Dobritch, Kavarna, and Razgrad, where 167,000 dka have changed hands. Still, this is a significant decline compared to the 408,000 dka sold in 2001. Fewer decares have been sold in the central part of Northern Bulgaria, too - 85,000. Least land has been sold in the Pirin mountain area - just 3,000 dka.If no major investor appears on the market, the volume of trade and prices will not change in 2004, experts claim. That investor is expected to be the National Land Company, which should become a real legal entity within two months. The other possible market incentive is the adoption of the Land Consolidation Act that will oblige small estate owners to enlarge their property within a deadline while taking care of their interests. Whether this will happen in 2004 is too early to predict. The experts of the Ministry of Agriculture and Forestry haven't yet prepared a concrete project and are still making experiments.

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