Slowing Bulgarian market to be boosted by new mortgage products
Thursday, 26th October
Hoping to attract more buyers and investors into the Bulgarian property market, brokers and lenders are starting to offer a range of new mortgage options.
With domestic and foreign first time buyers finding it difficult to buy in Bulgaria’s cities and resorts, particularly since Bulgarian mortgage providers often require large deposits (up to 35%) on only repayment loans, AJ Property Europe Ltd recently launched a 100% non status mortgage. This is designed for high end detached houses and aimed at the corporate rental market in Sofia.
Commenting on the launch of this new product, Steve Hodgson of AJ property said: “We are proud to announce a very unique and previously unheard of investment opportunity in one of the world’s biggest emerging markets Bulgaria. The standard purchasing method in Bulgaria is 70% mortgage and 30% deposit - not any more. We can now offer for a limited period 100% non status Bulgarian mortgages.” Homesgofast.com reports that the agent is working exclusively with one Bulgarian property developer and looking for potential investors to establish an overseas property portfolio without putting down a cash deposit.
Local banks have woken up to the potential from foreign buyers, and are trying to find ways to accommodate less affluent domestic buyers – particularly in places like Sofia which has seen phenomenal growth in the last two years. Postbank, a local bank in Bulgaria, has just launched a new 35-year mortgage product – although this is only available to buyers under thirty years of age.
While prices are not expected to match previous highs, they are still growing. Figures from the National Statistical Institute indicate that average prices of residential property in Bulgaria rose by 4.6% from July to September 2006. With property now sold for 865 leva per sq m, prices are 14% higher than the same period in 2005 and 11.3% higher than the end of 2005.
Figures also show that property in Varna has now become more expensive than Sofia. The average property price in Varna was 1,343 leva per sq m (about two leva more expensive than in Sofia). Property in Bourgas, another major coastal city, now costs 1,232 leva per sq m. The report found that the highest growth in property prices was in the towns of Blagoevgrad, Smolyan, Haskovo, Montana, Plovdiv and Stara Zagora.
Source: Overseas Property Professional
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