For many, buying a home "on the green" is risky. The biggest concern is whether the building will be completed. In fact, the real estate market has developed significantly over the past two decades. Based on experience and mistakes during this time, builders have managed to eliminate inaccuracies, and their clients have built a kind of "protection mechanism" from, to put it mildly, troubles related to having bought a property "on the green" or in the construction stage. The market, for its part, and especially the crisis in 2008, managed to weed out the dishonest players from the market.
Today, the market is dominated by companies that have established themselves over time. Of course, there are also isolated cases, such as the one recently, when a builder unilaterally terminates the contract with the client to whom he sold the wires. “Most investors and builders are extremely correct, complete their projects and do not resort to such practices“, emphasized Alexander Bochev, chairman of the National Association “Real Estate“ (NSNI). He recalled that when concluding a contract, it is mandatory for it to be reviewed by a lawyer or a broker. “In reality, “some money” is saved – in this case 3% of the broker's or lawyer's fee and we are exposed to the risk of signing a contract in which there are clauses that would be to our detriment”, he added.
The contract should not contain unequal clauses, there should not be rights that give advantage to one party. They should be reciprocal – if there are penalties for one party, there must be penalties for the other party as well. If the contract provides for sanctions in case of non-performance for one party, there must be the same for the other party.
The question arises as to how risky are real estate transactions? “If I say that they are 100% risk-free, I will mislead someone, but at the moment all the prerequisites for minimizing the risk are in place“, specifies Bochev.
First of all, builders manage to sell off their production even “on the green”, before they have completed the buildings in rough construction. This means that the sites are financed even before their completion. In 2008-2010, after the beginning of the financial crisis, a wave of bankruptcies was observed among construction companies, but then the conditions were different – at least mortgage interest rates were around 8%, and today they are 2.5%, and today financing is available to almost everyone. It is also important to take into account the drop in prices. “Before 2009, prices collapsed by about 30%-40% in Sofia and the big cities, while now prices are rising and builders can sell without hindrance and it is difficult to go bankrupt. Of course, if they invest their funds wisely“, says Bochev.
Today, people buy “on the green“ not because it is cheaper for them, but because if they want to buy a home on a good floor, exposure, layout, they have to buy it "on the green", because if they buy after a permit for use, the client either has to rely on the secondary market or on properties that have remained, "but they are not left by chance", specifies Bochev.
The question of what will happen to housing prices has always been relevant. As for 2025, it will probably turn out to be a peak in terms of appreciation of this type of property. “The NSI reported about 16% growth at the national level for the first half of the year, which is slightly more than the average level for the last few years, when it was between 5% and 15%. According to my forecasts, by the end of the current year it will probably reach 17%-18%, taking into account that the last quarter of the year is always the strongest. After that, probably in 2026-2027, we will observe a slowdown in the rate of increase and will probably return to previous levels of about 5% to 10% appreciation on an annual basis,“ concludes Bochev.
Detailed statistics on average property prices in Bulgaria by cities and neighborhoods can be seen at imot.bg