I know You have something to say!
A snapshot of the real estate market in Bulgaria
There`s a very interesting controversy going on these days.
All major local media sources for the real estate market state the it`s heading for a standstill,for bankrupt and so forth..
Foreign respected media sources,respectively CEOs,bring a slightly different notion.
It`s inevitable for the market here to experience difficulties.But,problems come along with possibilities.
Which means on purpose,or due to the local culture of desperation and all-bad attitude,we are told that the market is going down.Well,what does down actually mean?
Let`s have a look.
For the last several years,we`ve seen how pumpkins turned into carriages,in a way.Get the plot for 20E/sq.m.,wait a while sell it for 80E/sq.m.Invest 20 Mio EUR in retail,sell it for 50,then there`s the resell for 80.
Sober up.This is,of course going down.
So where is the problem,then?Investments in the real estate sector on the Black Sea Coast are decreasing in a stable manner.Well,construction works should have been limited long time ago.Apart from turning beautiful resorts into concrete jungles,these speculative investments made it possible for Bulgaria to enter the top50 emitting markets in 2008.We no longer welcome tourists.We are the ones welcomed by the hotels abroad.
So,no wonder there would be a slowdown and bankruptcy on the coast.It`s only natural.
What about the cities.Malls,malls,malls.Offices and retail boxes.That`s the situation in the few big ones now.Again,no more easy-way profit,got to work for it now,as the office and retail market in Sofia,Varna and Plovdiv is going for the saturation point.Which is a moment of fundamental mourning,if you check the local papers.
The win-win business model is nice,but it takes time and effort,no mere "I`m the Real Estate One" label,a shiny car and a plot.
And therefore,it`s only natural,that some people are crying over the lost dreams of easy profits.
Now,let`s be clear about one thing-everybody would suffer more or less,due to the crisis.There are no exceptions.But,what is more important,the ones to go first,are the ones that most probably have no business in the real estate market anyway,due to lack of professionalism,ethics or ability to adjust into the new market model.
Which means,there would be a sort of "healing" of the market.
It`s the ones fit to change,adjust and forecast well,that would remain here.To go a bit further,they would not only keep their position,but probably take the opportunity to get ahead of their competitors.
Which is how things should be in the first place.
For example,the global crisis also triggered another process-the rise of local players.
Fear expressed by foreign investors opened the way for local investors.
In the first six months of the year,EUR 745 Mio flowed into the Bulgarian real estate market.
This was the outcome of 20 transactions.59% of them were in Sofia.Provincial cities were only attractive to shopping centre investors.The main Bulgarian property companies in the H1 of the year were local(52%),followed by Greek(24%),and UK(14).
The crisis seems to have livened things in Bulgaria,with their share of the market rising by as much as 8%,compared to H1 of 2007.
These facts,however,are somehow missing in the Bulgarian media.It`s foreign consultancies and media,that bring these facts to our attention.
Furthermore,when we say foreign investments are decreasing,it`s true.But would it be a long-term steady increase?I don`t think so.Most of the foreign companies here are actually experiencing serious problems in other locations,which is a cause for freezing activities here.
The time has come,actually for new serious foreign companies to step foot on Bulgarian soil.Once some of them came,because no matter how incompetent the broker was or the tremendous difficulties with the bureaucracy,the company knew it will profit big time in a short period of time,even if it only sells what it bought.No more!Gone.
But,consider this:if you want to build a restaurant you do it on a good spot,but not close to another 10 restaurants,don`t you?What happens to companies in countries experiencing the full might of the crisis?They could wait for the storm to pass,or seek another sunny spot,which is often preferred.
Believe it or not,Bulgaria is still a sunny spot.
Just one example.2008 would most probably be the record year for warehouse tycoons.
Logistics is another part of the market that should go up.
Do you know what`s the situation in Bulgaria?
Well,could be better...
So,let`s leave the mourning.
It`s a national sport here,but perhaps it`s time to choose another discipline to compete.
All major local media sources for the real estate market state the it`s heading for a standstill,for bankrupt and so forth..
Foreign respected media sources,respectively CEOs,bring a slightly different notion.
It`s inevitable for the market here to experience difficulties.But,problems come along with possibilities.
Which means on purpose,or due to the local culture of desperation and all-bad attitude,we are told that the market is going down.Well,what does down actually mean?
Let`s have a look.
For the last several years,we`ve seen how pumpkins turned into carriages,in a way.Get the plot for 20E/sq.m.,wait a while sell it for 80E/sq.m.Invest 20 Mio EUR in retail,sell it for 50,then there`s the resell for 80.
Sober up.This is,of course going down.
So where is the problem,then?Investments in the real estate sector on the Black Sea Coast are decreasing in a stable manner.Well,construction works should have been limited long time ago.Apart from turning beautiful resorts into concrete jungles,these speculative investments made it possible for Bulgaria to enter the top50 emitting markets in 2008.We no longer welcome tourists.We are the ones welcomed by the hotels abroad.
So,no wonder there would be a slowdown and bankruptcy on the coast.It`s only natural.
What about the cities.Malls,malls,malls.Offices and retail boxes.That`s the situation in the few big ones now.Again,no more easy-way profit,got to work for it now,as the office and retail market in Sofia,Varna and Plovdiv is going for the saturation point.Which is a moment of fundamental mourning,if you check the local papers.
The win-win business model is nice,but it takes time and effort,no mere "I`m the Real Estate One" label,a shiny car and a plot.
And therefore,it`s only natural,that some people are crying over the lost dreams of easy profits.
Now,let`s be clear about one thing-everybody would suffer more or less,due to the crisis.There are no exceptions.But,what is more important,the ones to go first,are the ones that most probably have no business in the real estate market anyway,due to lack of professionalism,ethics or ability to adjust into the new market model.
Which means,there would be a sort of "healing" of the market.
It`s the ones fit to change,adjust and forecast well,that would remain here.To go a bit further,they would not only keep their position,but probably take the opportunity to get ahead of their competitors.
Which is how things should be in the first place.
For example,the global crisis also triggered another process-the rise of local players.
Fear expressed by foreign investors opened the way for local investors.
In the first six months of the year,EUR 745 Mio flowed into the Bulgarian real estate market.
This was the outcome of 20 transactions.59% of them were in Sofia.Provincial cities were only attractive to shopping centre investors.The main Bulgarian property companies in the H1 of the year were local(52%),followed by Greek(24%),and UK(14).
The crisis seems to have livened things in Bulgaria,with their share of the market rising by as much as 8%,compared to H1 of 2007.
These facts,however,are somehow missing in the Bulgarian media.It`s foreign consultancies and media,that bring these facts to our attention.
Furthermore,when we say foreign investments are decreasing,it`s true.But would it be a long-term steady increase?I don`t think so.Most of the foreign companies here are actually experiencing serious problems in other locations,which is a cause for freezing activities here.
The time has come,actually for new serious foreign companies to step foot on Bulgarian soil.Once some of them came,because no matter how incompetent the broker was or the tremendous difficulties with the bureaucracy,the company knew it will profit big time in a short period of time,even if it only sells what it bought.No more!Gone.
But,consider this:if you want to build a restaurant you do it on a good spot,but not close to another 10 restaurants,don`t you?What happens to companies in countries experiencing the full might of the crisis?They could wait for the storm to pass,or seek another sunny spot,which is often preferred.
Believe it or not,Bulgaria is still a sunny spot.
Just one example.2008 would most probably be the record year for warehouse tycoons.
Logistics is another part of the market that should go up.
Do you know what`s the situation in Bulgaria?
Well,could be better...
So,let`s leave the mourning.
It`s a national sport here,but perhaps it`s time to choose another discipline to compete.
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