Should I buy an apartment in Sofia now?
The crisis in Bulgaria is still very deep, which added to the new budget of the cabinet for year 2011, speaks for great percentage of unemployment and inflation, increased property taxes and uncertainty. On the grounds of that, the investors decided to wait for this year and see in which directions are the market and the economics heading, while those people who were about to take home loan, stopped the procedure because of the uncertainty of their income. The real estate agents in Sofia make prognosis that due to this economics situation, the only people that will be still looking for an apartment in Sofia would be those who need it very much and even these people could decide to focus on renting a Sofia apartment, usually a one-bedroom or a two-bedroom one.
Those people who were aiming to make a profit out of a Sofia property purchase are no longer on the market and this is easy to explain, as according to the statistics in the last few months the rental prices have went down with more than twenty percent. Thus, currently the renting of a Sofia apartment seems easier and much cheaper than the buying of such property. Even if there are people who decide to buy an apartment in Sofia, they should consider a few things. The most important one is to buy property in the good Sofia neighborhoods, which will always keep the interest of the investors – these could be the southern and the eastern districts in the capital, as well as the zones near the universities. Another important aspect is to try to reduce the price as much as possible.
Which are the main reasons that put off the buyers from purchasing a property in Sofia, despite the low prices? The first reason would be their inability to pay the mortgage, since people are not certain about their future and their work. The romantic times are over, now people carefully calculate whether the monthly payment would be more than 40 % of their income and think twice before signing a contract with the bank. The second reason is difficulty to get a loan, despite the advertisements on the TV, according to which banks are eager to lend you money. Now, banks have specific criteria and demand a good percentage of the money to be provided by you. On the top of that, the interest rates asked for by the banks reach ten percent, which is a lot. There are a lot of potential buyers who fear that the price of their properties will go down, and they are right especially when these are Sofia apartments in less prestige area with bad infrastructure.
