site.btaQuarter of Buyers in Bulgaria Interested Only in New Construction, Survey Shows

A total of 25% of buyers currently looking for residential property are only interested in new buildings. Another 50% of people prefer it, although they are also prepared to do a deal on a flat in an old building if the terms are favourable. This is according to the results of a national real estate market attitudes survey conducted by Realto Group companies, the group said on Monday.

“A lot of predictions of declines - in both prices and activity - have proved to be more than just wrong. On the contrary, we are witnessing a market that is at an absolute peak, the number of transactions is at a record high and there is no indication of this trend changing. At the same time, new construction is the main driver, especially in the big cities. This has led us to study the motives, needs and profile of customers. We initiated the national survey to meet the expectations and to be as useful as possible to our partners, to help clients and investors to look in one direction and thus contribute to a sustainable and predictable market,” commented Yordan Angelov, CEO of Realto Group. “We plan to make the survey an annual initiative to monitor changes in consumer behaviour in the short and long term,” he added.

According to the data, Sofia is expected to be the main attraction for customers – 64% of respondents are interested in buying a property in the capital. It is followed by Varna, Plovdiv and Burgas, with only 10% of the survey respondents interested in buying outside the four major cities of the country. At the same time, those wishing to acquire a property in the capital already live here, and migration to the city is mainly driven by those living in smaller regional and municipal centres.

New construction as an investment

Slightly over 70% of respondents are looking for a home for their own use, and about 30% want to invest. 

“New construction raises strong investment expectations among customers. Half of the respondents are looking for property to lease, while 33% plan to resell for profit. Only 18% of people are looking to save their money from inflation. This clearly shows that new construction is perceived as a real source of profitability and not just as an alternative to a bank deposit,” said Vesela Ilieva, Vice Chair of the Board of Directors of Realto Group and Managing Partner of Unique Estates / Christie's International Real Estate.

Clients have confidence in investors in new projects, according to the survey. More than 60% of them are ready to sign a deal before the occupancy permit – 34% indicate a willingness to sign a contract during the construction process, and another 28% - even before the start of construction. 

Why new construction?

Owning a home in a modern building was the primary motive of 29% of respondents in Realto Group's survey. They said that depreciation and lack of efficient maintenance made older construction unattractive to them. Modern building technologies and new building installations are the reason for a total of another 30% of respondents to prefer a new building. Being the first occupant is a priority for 14% of respondents. Around 9% of people said they would find a better social environment in new buildings, and expectedly better prices were a motive for 10% of customers. 

Most new-build buyers are looking for apartments – 86%. Only 6% of respondents are looking for a house close to the city and 5% for a house within the city. Only 3% are interested in buying a holiday property.

The age of customers determines the desired building

The type of multifamily building draws a clear dividing line between buyers, Realto Group said. A small stand-alone boutique building is the preference of 61% of customers, while the remaining 39% would buy a home located in a complex offering additional services and amenities. Large complexes are most favoured by buyers in the 25-35 age group, attracting about 53% of them.

Regardless of the type of building, 79% of people consider the availability of a garage or parking space as an extra. A well-maintained landscaped yard was the next most desirable for survey participants – 52%. Security and CCTV, as well as having a children's play area, are key for around 30% of new-build customers. The availability of smart systems is essential for 13% of respondents, with a much higher proportion of this convenience among buyers aged 25 to 35. A spa or gym in the building is important to 11%, while a swimming pool and reception are not important to customers with only 4% of buyers interested. 

Smaller area, more rooms

Area up to 80 square metres: 45% of buyers are interested in this size of apartment, and another 42% - in a home from 80 to 120 sqm. At the same time, however, 53% of people are looking for a three-room home and 29% for a two-room home. 

“Statistics show that people are looking for square footage that suits both 2-bedroom and 3-bedroom homes. However, at the same time, buyers are visibly preferring 2-bedrooms. This means that there will be an increased interest in relatively undersized 3-bedroom apartments and here a good and functional layout in the new projects will be of key importance," says Gergana Tenekedjieva, CEO of Address Real Estate, part of Realto Group. 

Profile of the desired home

In terms of the must-have features of the home itself, a beautiful view dominated the preferences of the survey participants – 55%. A large bedroom - over 15 sqm - is key for 48% of respondents, while a living room over 30 sqm is among the fundamental features of a property for 43% of people. More than one bathroom is important for 40% of respondents, while a cellar is desired by 33%. Around 24% of people insist on large or French windows and 18% on high ceilings. A walk-in dresser is an important interior element for 20% of respondents, while 18% of respondents to Realto Group's survey insist on luxury common areas.

Location is the most important criterion when choosing a new-build property, the statistics also show. A total of 38% of respondents cited the neighbourhood as most determining their purchase. Only second was the price of the home, which was a key factor for 32% of respondents. The third most important criterion appeared to be the quality of construction, which was the determining factor for 11% of people. The reputation of the developer takes the fourth place in the ranking of the main criteria of customers. This is followed by the availability of infrastructure, the size of the property, and proximity to parks and schools. Sustainable environmental practices did not emerge as a sustainable customer criteria.

Location, location, location

The most desirable is new construction in the centre of Sofia – 12% of respondents put it in their options for choice. The second most popular area is Mladost, representing interest for 11% of customers. Manastirski Livadi, where the supply of new projects is also higher, is among the choices of 10% of respondents. There is growing interest in Ovcha Kupel, which is on the list of desirable neighbourhoods for 9% of people. The neighbourhood's popularity is growing, as a number of quality projects have appeared there in the last few years, while at the same time the neighbourhood has already established infrastructure and access to the metro. Seven percent of the survey participants are interested in Krustova Vada and Hladilnika, while Boyana is the most desirable neighbourhood at the foot of Vitosha, followed by Bistritsa. 

Low interest rates continue to favour the market - around 74% of purchases are planned to be on credit, while 26% of transactions are expected to take place with cash - a share identical to that of investment-minded buyers, according to Realto Group's survey.