Investment vs. Rent: Sofia apartments prognosis. Sofia property sales and rental predictions.
If planning to settle down or at least to spend more than a year in a certain city always brings up the question of property investment. This process is connected with a larger front-end financing and a longer purchase process but the efforts are worth it, as such an investment brings security, better lifestyle and a number of facilities. Owning a property also means freedom to make interior changes and to place the furniture items you choose. Last, but not least is the peace of mind that nobody could raise your rent or kick you out.
Renting a place is a tempting, obligation-free living, which however is also connected with uncertainty in terms of the amount of the monthly rent and the short periods for which the contracts are signed. This of course is not valid for the holiday oriented short-term serviced apartments that are rented mainly by tourists. For this group of holidaymakers, renting is a far better option as they get more living space than that available in the hotel rooms, more privacy and a full set of amenities with the option for preparing their own meals. The serviced Sofia apartments have larger capacity and sometimes three people could get a much better price if renting one of these apartments rather than booking a hotel.
The question whether to invest or to rent has not one single answer valid in all cases. On the contrary, this is a strictly individual matter that should be carefully considered. The facts that have to be kept in mind are the current and the predicted financial status of the individual, the information provided concerning the world financial crisis and the cash funds one has.
With the world financial crisis going on and affecting all spheres of life, there are various predictions for the sales and the rental market in the Bulgarian capital Sofia for the next six months. Some are optimistic and the rest are very pessimistic. The truth however lies in between. Realistically speaking, the price of the real estate properties will remain stable but will not increase as they used to, as the financial resource will be limited and no mortgage will be available from the banks.
On the other hand, the prices of the properties will not drop, as the prices of the materials used, the land and the labor will increase. The developers will invest in fewer complexes, as their profit will not be as big as in the last five years. They will put a stress on the infrastructure rather than the number of the apartments. Most probably on the market will be offered the properties that arte bought with mortgages which could not be longer serviced by their owners, as well as properties that were bought for pure investment and speculative reasons. It is unlikely though that these properties will reduce the prices on the market.
This information leads to the question what will happen on the rental market. Most probably the demand will increase, due to the lack of mortgages available, the high interest rates, etc. More people will need lodgings and this will lead to an increase in the rental prices which increase will still be more affordable than the payment of mortgages. All analysts are unanimous that the currency board will preserve the stability of the Bulgarian currency. Once the income increases, the market will be stirred again as the people will begin to invest the savings they have and a new process will start.
