Sofia: safe or sorry?

What affect will the credit crunch have on Sofia property prices in 2008...?

According to Property Secrets, the impact will be minimal.  To back this up, the company spoke to Diana Radeva, an expert on the market who runs her own property management business in the capital:

“I am confident that the credit crunch will NOT have a major impact on property prices in Sofia and this is being echoed by all the major banks here in Bulgaria.

“Fundamentally, there is still a huge gap between supply and demand across all property sectors - residential, retail and industrial. Healthy economic growth will support demand so that projects will stay profitable and banks will be willing to finance them.

“I believe residential property will prove to be one of the most promising markets in Bulgaria this year - I refer to the Sofia and regional cities such as Varna and NOT the holiday home market.

Mortgages set to double

Miss Radeva continued: “Banks consider mortgage loans one of their main areas of business due to the demand for mortgage loans from the local market and not speculative investors.

“The good news is that most large banks consider retail banking their priority. We forecast that banks will practically provide unlimited resource to finance their business with private individuals and small businesses".

“A survey of GfK Bulgaria, a marketing research institute, commissioned by Raiffeisen Bank showed that the number of people planning to take out mortgage loans in the next two years will double over the number of mortgage loans taken out during the last 5 years.