Growing sales in compounds in 2015

The residential market in high and mid-plus segment in 2015 was determined by developments in two main directions - increased demand and lack of quality product on the supply side. The growth of the deals compared to 2014 amounts to 25%.The sales of three-bedroom apartments and houses doubled, whereas the two-bedroom apartments were less on demand, registering a 42% decline.

The main selection criteria remained unchanged. These were quality of the environment and construction, functional layouts of the premises, location, available infrastructure, fast and convenient/easy access. The emphasis was on the environment, not only in terms of greenery, space, services, but also in its social aspect. There has been a growing attention towards the comfort in the property, the size of the premises, the number of bathrooms and service rooms.

Supply marked a 2% increase, and the number of mid-plus and high-end residential units totaled to 6,690 sq. m., concentrated in 50 projects. Vacancy on annual base decreased by 2%, reaching 11% of the total volume. As a result to this development the construction of eight projects started in 2015. These are 420 residential units, located primarily in the southern districts of Sofia. In 2016 350 units in seven compounds on the mid-plus and high-end market are expected to be completed.

The low supply has resulted into a considerable proportion of sales of properties in the stage of construction, with an impressive share of 37%. Buyers choose developers, experienced in the segment and with secured financing. The portfolio of previous projects is considered an advantage, but not necessarily a must, when choosing an investor.

The limited supply and the increased demand led to a decrease of the difference between the asking  the final price. It went from 9% in 2014 to 5% in 2015. Prices increased by 5% varying from 850 to 1.500 euros per sq. m. including VAT. Deals in 2015 in mid-plus and high-end residential market were closed at an average price of 150,000 - 170,000 Eur for a two-bedroom apartment, 200.000 to 230.000 Eur -  three-bedroom apartment, above 250,000 Eur for a row house and above 350,000 Eur for a single house (transaction price with a parking lot/garage included), depending on the type, size, facilities and location.

The forecast for 2016 for the high-end and mid-plus segment in Sofia is for the above trends to continue. Demand will keep the upward trend and in response to that new projects will be introduced to the market.