Increases in prices of primary auctions conducted by private bailiffs for properties in Sofia has been observed since the beginning of the year. A square metre of a residential unit in neighborhoods likeMladost 4 and Lyulin 4, as well as Vazrazhdane already start from BGN1,100 to BGN1,400 for two-bedroom apartments of 65-70 square meters, some of which are in concrete blocks of flats. Even in the more remote areas of Lyulin district, the prices are around BGN800 per square metre. The same is the situation with multi-room housing units. For example, the starting price per square metre for a three-room apartment in Darvenitsa district is BGN1,065. Very similar are the figures for the three-bedroom flats in Mladost 2 and 3 that are located in prefabricated buildings from the 1970s. A home of 96 square metres located in the central Tsar Samuil street is offered for BGN2,600 square metres. Moreover, about 30% of public sales are held again at reduced prices compared to the initial ones. One possible reason was the decrease in the growth of non-performing mortgage loans and hence – the reduction of properties that go on public sale.
Time of cheap housing units available from private bailiffs seems to have gone. Now, lenders want to get more of the mortgaged property, in some cases, the auction price is well above the loan received by the debtor. However, whether this strategy will be successful, it is still early to predict. In Sofia on 10 March tenders for more than 70 one-bedroom apartments were announced, and the country’s total public register of sales at that time contained more than 3,000 listings. In Veliko Turnovo, a total of 14 ads for public sale of two-bedroom apartments made an average price per a square metre of BGN800. And according to the National Statistics Institute the average price of housing units in the town was BGN729 for 2011, registering a fall on an annual basis of over 10 percent.
Experts point out that the cheapest apartments have not completely disappeared from public sales, but due to their advantageous price are quickly sold, and some of them do not reach the tender procedure. This is made possible by the emergence of companies that are engaged in direct negotiations with the lender and prefer to deal primarily with affordable prices when purchasing homes. According to experts, the higher prices of sequestered property because of unpaid loans may come down at least by 15-20 percent in summer, if sales come to a standstill.
