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The third quarter of 2013 was the fourth period in a row when residential property prices edged lower, reports Novinite, with prime neighbourhoods seeing values decrease 1.8 per cent year-on-year.
The fall in prices has partly been attributed to high unemployment rates in towns such as Vidin and Vratsa and also sellers desperate to raise money. Indeed, rather than buyers not being interested, homeowners in Bulgaria would rather have cash than property.
While Novinite reports a continuing fall in prices, though, other analysis suggests that values of Bulgarian property are starting to recover.
Indeed, house prices have achieved quarterly growth on a real basis – once inflation and a Harmonized Index of Consumer Prices has been taken into account – according to BulgarianProperties.com.
The site’s latest report, based on apartment price data in Bulgaria’s regional cities from the National Statistics Institute, shows that in the third quarter of 2013, average property prices in Sofia registered their first real annual growth of 0.5 per cent.
On a national level, Bulgarian property prices did fall 1.18 per cent compared to the same three months in the previous year, but values rose 0.34 per cent quarter on quarter.
Without adjusting for inflation, prices in Bulgaria remain “almost unchanged”, notes BulgarianProperties.com, sliding 0.15 per cent quarter-on-quarter and 1.8 per cent year-on-year, but the real statistics are far more favourable.
“Deduction of inflation provides a more accurate estimation of the real price changes,” reads the site’s report, “so when using the NSI data we always make the necessary calculations to obtain a more precise market picture. “
Indeed, In Sofia, apartment prices increased 0.67 per cent quarter-on-quarter and 0.17 per cent year-on-year, but after inflation, values grew 1.17 per cent quarter-on-quarter and 0.5 per cent year-on-year.
While adjusting for inflation shows the promising start of growth for Bulgarian house prices, it also reveals the extent of the country’s housing crash: the nominal price drop of apartments in regional cities since the beginning of the crisis is 39 per cent (and 41.5 per cent in Sofia). Once adjusted, the real fall from the market peak if 44.5 per cent (and 46.77 per cent in Sofia).
Prices may be starting to improve; but they have a long way to go.
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