It frequently occurs that buyers who search for a Bulgarian property come upon offers for luxury ones. However, the question is whether these properties are really luxury or they can rather be classified as standard. The luxury real estate market is yet to develop as we are, experts say, still far from the generally-accepted standards for it.
Supply of prestigious properties has been scarce due to a shortage in demand. Nevertheless, there are offers, which are limited to the areas of Sofia and Varna, the two capitals in Bulgaria, the real and the Black Sea one. Nikola Stoyanov, the General Manager of Lux Imoti, an agency dealing with prime properties, believes these two cities are comparable in terms of prices for prime properties.
"In the last couple of months Sofia has retained its high market prices. It seems as if the prices of luxury properties in Plovdiv have been lagging behind lately, which is an obstacle for developers who would rather avoid expensive finishing works and facilities. There are several major factors that influence the price formation - land values, buyers’ purchase power, demand, the value of labor and materials. The prices in Sofia and Varna are the highest in the country because of their developing urban economies", says Mr. Stoyanov.
And while for some the lifestyle motive is the reason to purchase a property, others see it as one very profitable investment. Mrs. Vesela Ilieva, General Manager of Unique Estates, another agent in the luxury segment, says: "There are a few very important things about a property: location, architecture, historic and cultural value, interior luxury finishing works, view and last but not least the specific spirit and style of the property. The more luxury characteristics a property has, the better investment it is. Nevertheless, the criteria are various and quite specific." Confirmation that many of the characteristics of residential properties offered as luxury in Bulgaria are in fact typical for normal average homes in mature markets of Western Europe is found in a report of economic and marketing researchers Industry Watch, commissioned by Lux Imoti. Their study involves apartments and houses in gated residential communities, as well as individual houses and apartments. The consultants have paid special attention to characteristics such as quality of construction, locations, services included, prices etc.
A large number of gated communities will be completed in 2008 and 2009 mainly concentrated in Sofia and Varna, where most luxury apartments are located. Usually situated on first or top floors of residential buildings these are penthouses of about 250 sq m in size, with one or two terraces of maximum 25 sq m, a living room, one kitchen, two bathrooms and three bedrooms. They are built according to individual architectural projects and are delivered completed, different from the common case in Bulgaria. They also feature additional amenities like fireplaces or Jacuzzis.
Such complexes are usually located in neighborhoods with enough undeveloped areas, suitable for residential development and close to main thoroughfares. The main districts in Sofia with high concentration of gated communities are Manastirski Livadi, Knyazhevo, Mladost 4, Borovo, Simeonovo, Dragalevtsi, Malinova Dolina. Such properties can also be found in the most expensive areas of the capital like Lozenets and Iztok. Most of the residential gated communities in Varna can be found in the areas of the Sea Garden (Morska Gradina), Briz and Vazrazhdane neighborhoods, close to holiday resorts like Sts. Konstantin and Elena. The residential complexes’ prices are higher compared to the prices of 2-bedroom new build apartments, with prices differing as much as 150 to 300 euro per sq m.
On the whole, prestigious individual apartments in the best areas are divided into 2 groups - apartments located in existing blocks of flats and new builds. The first type is usually offered after an overhaul, furnished with expensive, quality furniture. Additional extras like elevator, garage and property management and maintenance also make these properties more expensive. Nevertheless, the offering of additional services is very limited, which is the reason why very few apartments of this type meet the criteria for luxury properties.
New projects feature modern architecture, good condition of common areas, garages or parking. The lodgings are offered almost completed with options for individual interior designs. There are extras, which are similar to the ones in gated communities. The basics of most of the projects include modern security systems, communications, easy access to sports facilities, and maintenance of common areas. That is why a number of these lodgings match luxury standards.
These properties have relatively high prices as supply of land is limited and so are opportunities for new projects. However, their main advantage is the location and the close distance to the centre of Sofia, as well as easy access to large administrative, shopping and entertainment facilities. The areas of Iztok, Lozenets, Ivan Vazov and Meditsinska Akademia in Sofia are the prestigious ones and in Varna the priciest properties can be found in Gratska Mahala, Morska Gradina, Chataldzha and Cherven Ploshtad.
The average price of a 90 sq m, 2-bedroom lodging ranges from 1,400 to 1,600 euro per sq m, while the maximum price in Sofia’s prime areas is between 2,100 and 3,000 euro per sq m. The most expensive luxury homes are found in Yavorov and the cheapest ones - in Ivan Vazov.
The average price of Sofia’s prestigious apartments is 3,500 euro per sq m. Most of the luxury apartments worth over 500,000 euro can be found in the city center, in Lozenets and Iztok. These apartments feature marvelous locations (either in old buildings built before 1944 or in new, boutique ones), high ceilings, spacious rooms. Usually they go with furnishing, garages, and panoramic views. Most of them are penthouses. Large apartments (of over 400 sq m) are normally located on top floors and have large terraces. They have prices near the average levels for the areas due to their much larger size.
In Varna two-bedroom apartments of over 90 sq m located in prestigious areas range in prices between 1,100 and 1,550 euro per sq m. The maximum price reaches 2,000 euro, which is significantly lower than in Sofia. The most expensive areas in Varna are Gratska Mahala and Morska Gradina. Central Sofia offers higher prices for luxury houses in prestigious areas like Ivan Vazov, Iztok, Boyana, Simeonovo and Dragalevtsi. The Industry Watch research shows that the reason behind the average price of 3,000 euro per sq m is limited supply. Basic factors for the formation of prices are location, yard, garage or parking, interior design, repairs of the property etc. The prices of properties in Simeonovo, Dragalevtsi and Boyana (all situated at the foot of Vitosha Mountain) range within close limits - between 1,200 and 1,500 euro per sq m.
Main locations for the development of gated communities of single-family houses are Sofia’s neighborhoods Malinova Dolina, Simeonovo, Dragalevtsi, Krastova Vada and Boyana, located in the outskirts of the city.
Most of the supply in Varna is concentrated in Morska Gradina, Gratska Mahala, Briz, Galata and wide center as well as the neighboring holiday resorts. They feature relatively high average prices of properties and many undeveloped areas and are situated close to main roads, which allow easy access to the city center. The prevailing types of homes in Varna are residential complexes consisting either of apartments or of a combination of apartments and single-family or semi-detached houses. A similar complex, combining apartments and houses, has been planned in Morska Gradina. Complexes of houses have been planned out of town, near the holiday resorts.
Although property management is a common practice in most European countries, it is still perceived as an additional service in Bulgaria. There are also other problems that still need to be solved in order to speak of luxury, say analysts. These include improvements of infrastructure, quality of construction, as well as overdevelopment.
Source: Index Imoti Magazine
