Mortgaged Houses Flood Property Market
Constantly increasing transactions with mortgaged property units that passed into the ownership of the lender can be observed in recent months. The reasons are clear - reduced prices on these homes tempt people with cash or those who have access to bank credits. Each week, on the sites of private bailiffs post attractive offers for auctions of apartments of defaulting debtors. One of the last sales, which was announced and must take place in late August, is for a well maintained and renovated apartment of 50 square meters in one of the most expensive areas in the city - Yavorov district, the initial price being BGN50 thousand. At good bid the auction usually raises the price by 3-5%, so everyone can judge how profitable such a deal can be in which the value of a square metre is about EUR500. Just a year and a half ago a square metre in this central Sofia region could not be obtained for less than EUR1500-1800.
The market in Sofia is increasingly flooded with homes that are sold against BGN30,000, although in most cases these are concrete flats in the suburban Ljulin, Botunets or Ovcha Kupel with an average area of 40-60 square metres. But for such a sum before the crisis one could purchase only 4-5 square meters of a flat, brokers remind. The situation in other larger cities is similar. In Plovdiv, BGN32,000 now can buy a flat of 68 square meters, while in Varna an apartment with a market value of BGN80,000 is offered for sale BGN42,000, while in Stara Zagora one can buy a 65-square-metre apartment for BGN30,000.
According to real estate agencies, transactions in mortgaged housing units at auctions held by private bailiffs or directly from a debtor who sells to repay the creditor, have occupied almost half of the market. Now is the time for people with opportunities not only to acquire a very profitable home in the capital city or major regional centres, but also to protect their money from inflation, say experts. In addition to inexpensive housing offers the luxury one are also abundant and they are three to four-fold less pricey than a year ago. For example an apartment of 140 square meters in the prestigious metropolitan district Lozenets is put for sale at an opening price of BGN273,000, which makes about EUR950 per square metre. If the first sale fails, perhaps the price will come down with at least another 100-150 euros per square metre, which is a lucrative offer for a district that kept the highest prices in Sofia for years.
According to experts, if this trend of offering for sale more and more new housing units is maintained until the end of the year, they will increase their market share to over 50 percent. The prerequisites for this exist, moreover, that some of the units were transferred to be offered for sale by individual agencies for facilitating conditions for the buyer because the procedure of buying through a private bailiff is still quite cumbersome.