Posted on: 03/19/2019
What are the expectations about the real estate market development in a year according to your observations on the demand and supply so far?
It is difficult to foresee the market after a year but definitely, there are some factors that have a positive impact on its development in Sofia. The increase of the wages in the capital city by about 10 % on average in 2018- the low interest rates on mortgage loans between 2 and 3 % - something that gives opportunity to many people to invest or buy for their personal needs- the unemployment rate in Sofia is 3,77% which proves the activity on the labor market- in July the Euro group gave the go-ahead to Bulgaria to start the way to the Eurozone, which inevitably will result in increase of the price of real estates. When Bulgaria enters the Eurozone many foreign funds will show interest to Bulgaria because this is one of their criteria.
Please share your observations about the movement of the interest rates under mortgage loans and your forecast whether purchasing a real estate by a loan is an advantageous strategy?
Yes, as I already mentioned until recently 6%, but now the banks offer their clients interest rates between 2 and 3%, which motivates the investors. When a real estate is rented, the profitability is about 6% in Sofia. Roughly it means that the rent price is higher than the loan installment. In which regions in Sofia the demand/ supply of real estates is the highest?
At present, there are regions where the demand exceeds the supply and this is the downtown of Sofia and Doktorskata gradina (the Doctor's Garden). I would add that there is a market for each property in the capital city if its valuation is adequate.
Which type of property is preferred for investment – an apartment in the downtown or a house in the suburbs? Which is the more beneficial option in your opinion? When we talk about an investment, a term like "the more beneficial option" does not exist because investors assess the profitability of the property. The higher is the profitability, the better is the investment
Is there a need to change the real estate agency practices in Bulgaria? What is it?
Unfortunately in Bulgaria being a real estate agent is not a regulated profession as in other countries where each agency is required to pay a license fee. There isn’t any authority to control the activities of the real estate agencies on the market. The long-term investment in purchasing a license will result in increasing the quality of service and the responsibility of the real estate agencies and agents.
How has changed the approach of the brokers in the course of time and with the development of the technologies? What are the other factors that could influence in future?
The number of well-prepared agents who know the real estate market is increasing.
Do you consider that the technologies may change the agency model/ the need of agents in the near future?
I think that we are far away from the moment when we will not need personal contact with an agent due to the fact that for a great part of the people, purchasing a real property is an important moment in their life and they need attention and time, which the technologies may not offer.
Which are the most common mistakes of the users of agency services?
One of the most common mistakes is the lack of confidence on the part of the seller when it concerns the evaluation of the property being sold. Often the properties are overvalued by their owners. Often the buyers make the mistake not to spare enough time during the first meeting with the agency in order to discuss in details their demand criteria. This results in loss of time for both parties as well as to unrealized transactions. It is of great importance that the agent understands in details the client's need.