- Political stability
- Fiscal affairs
- Monetary policy
- Regulated markets
- Privatisation
- Macroeconomic developments
submited on 29.12.2011 in category Monetary policy | Macroeconomic developments
Industry Watch distributed among its subscribers the regular quarterly report “Personal Assets in Bulgaria: Financial Wealth and Housing Market, Q4 2011”. Here, we present You with the highlights of our research.
The financial wealth of the population increased to BGN 42.6 billion (EUR 21.5 billion) as of end-September 2011. Compared to the previous quarter, there was a notable increase of bank deposits (by about BGN 1 billion or EUR 500 million), while household assets in pension funds grew only marginally.
The growth rate of financial wealth slightly accelerated – to 12% year over year as of end-Q3 2011, remaining firmly above 12% per annum in the last 12 months. The increase of household savings to a large extent compensated for the yet another housing depreciation.
Deleveraging in Bulgaria is taking place mostly with regard to non-housing indebtedness whereas mortgage debt continued to pile up. As a result, the total net wealth changed only slightly in the last 3 years, currently amounting to some BGN 118 billion or EUR 60 billion (Please, refer to the Chart).
In the post-crisis period, the differential between the prices in the city with the most and the least expensive housing shrank almost two-fold compared to the record-high levels, reached during the market’s peak.
Although demand for housing remains somewhat weak, there are a few leading indicators revealing that we might see an increase of buyers in the quarters to come.
Due to the ongoing devaluation of housing – by cumulative 36% from the peak of the market, the purchasing power of the average wage steadily increased – by 14% per annum. Parallel to that, the official statistics reported an increase in people’s intentions to purchase or build a primary or a secondary house in the next 12 months.
This report is a regular analysis of financial intermediation, household wealth and the housing market. The analysis is based upon economic methodology, which makes it suitable for use by finance professionals, macroeconomists, and specialized business observers.
The full report in issued quarterly. Subscribes have access both to ready-to-print document, as well as a detailed database.