Bulgarian forecast 2009

Residential property prices in Bulgaria and Romania are set to continue in a steep decline in 2009, according to the latest research report into these country's real estate markets...

Analysts at global real estate consultants Jones Lang LaSalle expect prices in Sofia to fall by up to 12 per cent and an even bigger decline of up to 20 per cent in Bucharest in 2009.

While sales trends and home price movements will be downward in both capital cities, Sofia will slide slower than Bucharest and see smaller declines.

The downward trend is expected to persist throughout the year and analysts do not expect to see signs of a turnaround before 2010. They believe that entrepreneurs and property investors will adopt a wait and see attitude.

The main factor that is driving down the property markets in Bulgaria and Romania is the withdrawal of foreign investors, but they are also suffering from tight credit conditions that cut into funding options for local investors.

In a separate report Jones Lang Lasalle analysts say that the property markets in the UK, Ireland and Spain have already hit rock bottom and are headed for a gradual recovery.

These real estate markets are seeing signs of increased activity as investors show interest in finding opportunities even before confirmation of the market reaching a turning point. In London and Spain, where confidence is improving, bid prices for properties have been surprisingly strong, the report says.

The signs that the crisis has started to subside are expected to start unfreezing the markets in other leading world economies in the coming months. But a complete recovery will only be possible two years after the economy itself has shaken off the crisis, the consultancy firm forecast.

This is based on its historical research into the behavior of the property markets which shows that recovery in the property market lags improvements in the economy by as much as two years.

Source: www.propertywire.com