Somewhat out of touch with global financial issues and foreign buyers’ chill, developers are still the active side on the first and second home markets. Some of them reckon that the strong market development will follow in the next 2-3 years, especially in the urban residential segment. “Supply in Sofia has grown by 40% compared to last year. While in 2003 we had only 2 000 apartments on the market and 5 000 in 2007, this year we expect this number to grow to 8000 units,” said Rosen Plevneliev, General Manager of Lindner Immobilien Management. The General Manager of Winslow Developments, Ivan Mekushin, agrees that the country has still a way to go before the residential market peaks. Besides problematic infrastructure, land price is also and issue that comes to the fore. All this makes projects more expensive some business plans inefficient. According to Liron Or, of Engel East Europe, a residential development company in Eastern Europe, the problem with high land values root into the fact that prices are formed on the basis of buildable square surface. Vendors boost prices to their maximum levels, which do not quite correspond to whether the market needs that much space. Restricted lending will probably reduce the number of projects of poor quality and riskier developments as there will be a wide scope of projects to select from. “The combination of more proper investors and more cautious financial institutions will bring prices back to normal levels,” Mr.Plevneliev said. Although foreign investors are active in the domestic residential market, they mostly influence the holiday homes one. After Some very successful years of investing in Bulgaria, UK buyers seem to show less interest since the beginning of 2007. A slow вЂ" down and oversupply are also observed. Russian buyers, however, are a flicker of hope for the recovery of the segment. The Executive Director of Bulgarian Land Development, Dimitar Savov, said Romanians and some Central European buyers also started to take interest in the holiday home market. Bulgarian investors, however, are still very few.
High land prices and poor infrastructure are some of the major problems on Bulgarian residential market, Mr. Liron or (Engel), Mr. Rosen Plevneliev (Lindner Immobilien Management), Mr. Ivan Mekushin (Windslow) and Pablo Losada (Martinsa вЂ" Fadesa) agreed.
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