You are in Home > News > Regulated markets > Industry Watch released its report Housing Market in Bulgaria/Q3 2007
- Political stability
- Fiscal affairs
- Monetary policy
- Regulated markets
- Privatisation
- Macroeconomic developments
Industry Watch released its report Housing Market in Bulgaria/Q3 2007
submited on 12.09.2007 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 12.09.2007 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
Industry Watch released its report Housing Market in Bulgaria/Q3 2007. Main topics include:
• One of the fundamental preconditions for the mortgage crisis is the loose monetary policy, which the Federal Reserve followed, as in 2006 the base interest rate plunged to 1%. This allowed for people with relatively low income to accumulate considerable indebtedness.
• Main negative consequence of the global mortgage crisis for Bulgaria is the rising cost of external financing, which will reflect on Bulgarian banks, as well as foreigners and emigrants, who purchase real estate here.
• Housing credit in Bulgaria maintained its high growth rates, registered in the last few months and continued to expand at 75-79% annually.
• Interest on leva-denominated gradually declined – from 8.48% in May to 8.12% in July Restrictive monetary policy in Bulgaria (raising RMR by BNB) and in the Euro area (steady base interest hikes) made banks’ access to financing more expensive. Additional pressure is recently put by the decreasing liquidity on the global interbank market resulting from the mortgage crisis in the US.
• Annual growth of new housing construction permits decelerated relative to Q1 both in terms of number of permits and floorage.
• Average housing prices’ growth in Q2 according to data from NSI slowed down to 5.4% (relative to Q1), as the price reached BGN 1041 per sq. m; the average price change for the 12 months in the year to June is 27%.
• In Sofia smaller apartments remain relatively most expensive (as price per sq. m), despite there is accelerated growth among three-room apartments as well.
• Average rents in Sofia picked up by around 4% after our last observation in June. Three-room apartments in the premium areas continue to be relatively cheaper to rent.
• One of the fundamental preconditions for the mortgage crisis is the loose monetary policy, which the Federal Reserve followed, as in 2006 the base interest rate plunged to 1%. This allowed for people with relatively low income to accumulate considerable indebtedness.
• Main negative consequence of the global mortgage crisis for Bulgaria is the rising cost of external financing, which will reflect on Bulgarian banks, as well as foreigners and emigrants, who purchase real estate here.
• Housing credit in Bulgaria maintained its high growth rates, registered in the last few months and continued to expand at 75-79% annually.
• Interest on leva-denominated gradually declined – from 8.48% in May to 8.12% in July Restrictive monetary policy in Bulgaria (raising RMR by BNB) and in the Euro area (steady base interest hikes) made banks’ access to financing more expensive. Additional pressure is recently put by the decreasing liquidity on the global interbank market resulting from the mortgage crisis in the US.
• Annual growth of new housing construction permits decelerated relative to Q1 both in terms of number of permits and floorage.
• Average housing prices’ growth in Q2 according to data from NSI slowed down to 5.4% (relative to Q1), as the price reached BGN 1041 per sq. m; the average price change for the 12 months in the year to June is 27%.
• In Sofia smaller apartments remain relatively most expensive (as price per sq. m), despite there is accelerated growth among three-room apartments as well.
• Average rents in Sofia picked up by around 4% after our last observation in June. Three-room apartments in the premium areas continue to be relatively cheaper to rent.
What is your opinion about this article?
0 agreed
0 disagreed