Luxury Real Estate in Bulgaria : Are we there yet?

Despite another drop in building permits being issued in the third quarter of 2009 – a few luxury housing starts have been announced in Bulgaria.It is all too easy to concentrate on a single market, but the global nature of the financial crisis is something to take into consideration when planning for the future.

Q3 2009, only 1783 residential building permits were issued for a total of 509 units, a thirty five percent drop from 2008 – itself a bad year, and the number of new apartments completed fell over 60%. Permits issued fell in all sectors, although the luxury residential sector has been hardest hit with luxury real estate values having fallen some 60-70% from their peaks. Like the USA, foreclosures are an issue and the amount of inventory continues to grow, as banks still will not lend easily.

But – a glimmer on the horizon in Sophia as “Plana Properties” has just launched an enclosed complex of ten luxury homes and “Immorent,” a luxury condominium project in Simeonovo consisting of 15 small blocks and 200 condos.

At the moment, these are both “planned launches,” and I suspect that they will only go ahead if a reasonable number are sold pre-launch. Still – as can be seen from this chart, construction spending continues to fall, and if these do actually launch, this trend may start to be reversed as the combined value of these projects should be in excess of E70 million.