I'm a bit confused by this article. You start off by mentioning a 'resounding vote of confidence' and then go on to talk of a static market, maybe 5-10%, as if the bulk of the growth is already over.

It was only about 10 months when you offered Winslow gardens, and in the report it said:
'Current capital growth in Sofia is averaging 15% a year. However, we forecast this rate will rise 20-25% as the market takes off.'

Now I know you don't have a crystal ball, but this is a pretty quick change of tune.

Regarding the 866 to 1350 growth in Winslow Gardens, are you sure you are comparing like with like here? This would be a 56% growth during 10 months when the concensus seems to be that the market was flat. The price per m2 in these development always seems extremely optimistic. I calculated that I have paid a total of 1243 GBP (about 1550 euros) per internal m2 for my unit in Winsow gardens. So somewhat more that 866. I hope that when I come to sell, the 1350 you mention is equally optimistic.

With regard to the mortgages, I wasn't aware that banks would offer a mortgage on the current value of an off-plan property. I thought it was sale price only. Maybe I am wrong.

I must admit I share Minsk's sentiments. Is this a revised forecast, or just a very conservative one to counterbalance previous, more positive ones?

I suppose I'm most worried because in effect the article is saying that investors are only likely to get an LTV of about 50%, whereas I was working on the basis of 75%.

Any clarification would be most welcome.

I had the same concerns as hunkydory, so I passed the question on to Bulgarian Home Loans. I highlighted the issue regarding 50% LTV and mentioned Raiffeisen.


This is their response:

“The highest LTV on a completed property in Bulgaria is 80%. Not all banks have reduced the LTV on their mortgage products, however you are correct that Raiffeisen have. I expect the mortgage markets in Sofia to mature significantly over the next 2 -3 years, more products are likely to be available by 2010”

In other words, there should be no need to worry for international investors at the moment.

//Yoohan