The real estate in the town of. Plovdiv
Plovdiv real estate market is among the most promising in Europe
They say the last chance to buy bitcoin at a good price was in 2019. Since then, Tesla stock has shown a 1,200% increase. And the shares of the leading IT company in Russia “Sberbank” in a few days collapsed by 95% (!). How in such difficult times to find an asset that will save the investor’s nerves and give a stable income?
The answer is that real estate can become a safe haven. Today one of the most sought after cities in Bulgaria in terms of housing demand is Plovdiv. “Ancient and Eternal” attracts modern investors with a number of undeniable advantages:
– Plovdiv is one of the fastest growing economies in the country. There are representative offices of large companies, offices of large enterprises and retail chains. The commercial sector is one of the fastest growing. Several new modern shopping malls and huge hypermarkets have been built in recent years. Due to the growing demand for office space, an entire business park has been built. The Plovdiv Fair, which is held in Plovdiv, is the largest in Eastern Europe. The event attracts more than 600 000 visitors from different countries.
– Plovdiv is a major cultural centre of Bulgaria. The life of the city is full of creative events, exhibitions, theatre and opera performances. In 2019, Plovdiv received the title of European Capital of Culture, which significantly increased the tourist and investment attractiveness of the city. Naturally, this affected the dynamics of real estate prices.
– The construction boom in the “city of seven hills” has led to the fact that housing prices have been rising for several years. According to experts, the market continues to shape up, and the abundance of new construction allows investors to choose between a capitalization strategy (where apartments are purchased for profitable resale) or a passive income strategy (renting allows you to earn extra income and stay in the asset).
Who are the main real estate buyers in Plovdiv?
First of all, it is the residents of Plovdiv themselves who are striving to improve their living conditions. Young people for whom housing becomes the first serious acquisition in life. Residents of surrounding villages and towns who want to move to the regional center. Quite a large segment of potential investors are Bulgarians living abroad. They invest their savings in their homeland, where Plovdiv occupies a favorable position: the price per square meter is lower than in Sofia, while it is the second largest city in Bulgaria and an important economic center. Another audience of buyers are foreigners who buy real estate in the area of Plovdiv universities for their children.
The interest of a certain category of investors in commercial real estate is clearly tracked. Small premises attract small businesses for long term rent. However, it is worth noting that finding a tenant may take some time, or tenants may move out due to economic issues. The risks of this strategy are higher than those of residential, but the profitability here is also significantly higher.
Real estate in crisis
The pandemic is correcting the real estate market as the expected price collapse is not happening. Moreover, the pandemic has become an unexpected driver of housing demand in Bulgaria. From the beginning of 2021, the volume of real estate transactions in Sofia and Plovdiv is growing not only compared to 2020, but also compared to the pre-pandemic year 2019. Real estate can react to shocks in six months, and a year – that’s normal. And the shock itself can be “mild”. Another example of how the market quickly recovered from shocks: recall the 2008 crisis, then prices returned to pre-crisis peaks literally within 2 years. That is why the current crisis (the war in Ukraine) should be seen as one of the factors that will stimulate the demand for rent and purchase of housing throughout Bulgaria, including, of course, in Plovdiv.
“Bubble?” – The main question that worries every investor
Prices per square meter are steadily creeping up. This is facilitated by several factors that determine the movement of the market. Record low interest rates combined with high mortgage availability, runaway wages and low unemployment, and high internal migration. All of this has increased the number of solvent buyers, outpacing the pace of residential construction. The end of the era of loose monetary policy will mean some market correction. In this case, those wishing to buy real estate will try to accelerate their intentions before making ECB decisions. Finally, the inflationary risks that we are now seeing are also contributing to the fact that potential investors are shifting their capital to real estate.
Market prices
Plovdiv real estate market offers a large selection of apartments for every taste and pocket both among new buildings and on the secondary market. The apartments “Ostromila” and “Belomorski” are preferred by buyers. Choosing between the two areas, “Ostromila” is a preferable option due to the developed infrastructure and prices per square meter – about 1000 euro/sq.m. The central part of the city traditionally arouses increased interest among investors, and the square meter is valued at 1300-2000 euros. The area “Karshyaka” is also very popular because it is perceived as a “wide centre”, prices here are in the range of 800-1500 euros per square meter, depending on the distance from the centre. “Thrace” is one of the largest, fastest growing areas where many new attractive business projects are being implemented. The most illiquid in terms of investment are the “East” and “Sunrise” areas.
Conclusion
Plovdiv is a dynamic city whose economy has recovered quickly from the pandemic-related turmoil, and gross value added per person has reached 7% growth. The potential for real estate price growth has not yet been exhausted, the interest of investors is not waning. Demand continues to outstrip supply. Annually, Plovdiv invests over € 861 million in long-term assets. This is why Plovdiv is one of the most promising real estate markets in Europe today.
Our company Focus Real Estate has been on the market for 4 years and provides a wide range of services to its clients. We will save you the inconvenience and excitement and help you profitably sell/rent/buy/lease real estate at the best price. Our managers are the first to learn about the “most appetizing” construction sites and offer them to our clients. Time, as you know, is money.
