Bulgaria continues to boast the cheapest housing in the EU despite average annual price increases of 21% in the last five years, shows a comparative overview of 19 EU property markets to be released by real estate company Era.
A price of 300,000 euro for a top-quality home was considered ok in 2006 whereas a year ago it would have been priced at around 150,000 euro, said the authors of the report.
One of the factors driving housing prices was Bulgaria's EU entry in late 2006 when demand briefly outpaced supply.
In 2006 alone, Bulgaria housing prices added around 15% after jumped close to 40% the year before, said Era. Over the past five years, Bulgarian home prices have tripled.
And so far 2007 is proving to be no exception as far as major metropolitan markets are concerned. Some Bulgarian cities posted a 25% increase in property prices in Q1 2007. The market value of old homes is steady while upscale housing properties gained 10% year-on-year in Q1 2007.
The average Sofia home cost 78,000 euro in 2006 versus a nationwide average of 44,000 euro.
This compares with, for instance, Austria where the nationwide average is 165,000 euro while the price of housing in the capital Vienna is 242,000 euro or the Czech Republic where the nationwide average is 67,000 euro and the Prague number is 112,000 euro.
However, to get a balanced view of the Bulgarian property market, the Era data should be contrasted with recent press reports, claiming that Bulgaria has the least affordable property for its domestic citizens in the EU.
Although the Eastern European country has some of the lowest prices on the continent - with an average property costing just 54 570 euro, low average earnings mean property remains expensive, according to property search engine Properazzi. An average annual wage of 1,884 euro means it costs the equivalent of 29 years' salary to make a property purchase in Bulgaria. This compares to an average of just nine years in the UK.
According to Era, revenues from the sales of Bulgarian housing properties to foreign nationals tripled year-on-year to 1.1 bln euro in 2006, a trend that the company expected to persist.(Dnevnik)
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