Professional association of realtors set up to improve standards in real estate sector
Legislators in Bulgaria are looking at drafting a new law that will make it compulsory for estate agents in the country to have a professional qualification.
Bulgaria, whose real estate market has been badly hit by the global economic downturn with foreign buyers deserting the country, has had a bad reputation for rogue agents with stories of people being ripped off emerging.
A number of unscrupulous operators took advantage of the unregulated nature of the real estate sector to set themselves up as real estate agents, often disappearing with client’s money or charging outrageous fees.
Now the setting up of a professional association of realtors, along the lines of such associations in other countries, is being considered to inject proper professional standards in the real estate business and to establish a public register of companies and individuals in the real estate sector.
The Real Estate National Association said that the bill would provide for the introduction of mandatory requirements for qualifications to become real estate agents and brokers.
It wants businesses in the sector to have legal and financial standing and professional liability insurance so that, in the event of serious negative consequences for the client, compensation would be possible.
Meanwhile, the latest figures from estate agents suggest that the fall in the countries property prices is bottoming out. The number of real estate transactions in 2011 was up by 22% compared to the previous year, according to real estate consultancy firm Yavlena.
The number of transactions involving mortgages increased by 4.2% and their share in the total number of real estate deals declined to 15% compared to 25.7% in 2008 before the credit crisis and suggesting that mortgage finance is still hard to obtain. This is despite a decrease in the annualised interest rate charged by banks for mortgages.
Demand for apartments in the medium and high price sector fell drastically. Most prospective customers sought housing in the low price range, defined by Yavlena as €25 000 to €50 000 but supply of such units is low.
Yavlena said that prospective buyers were a lot more cautious and less optimistic about the future, but also better informed about financing terms than at the peak of the real estate boom.
Housing prices continued to decline, but at a slower pace than in previous years. The company said that it envisioned the same trends continuing this year and in 2013.
Bulgarian Properties said it is more optimistic as real estate prices are stabilising as are the number of property transactions. Buyers are being attracted by steep price declines in the country’s winter and seaside resorts with Russian keen on properties on the Black Sea coast.
Russian and Bulgarian buyers are now the mainstay of the holiday properties segment of the market that was once dominated by British and Irish investors, the company said.
This will only help improve the real estate industry for Bulgaria. The next step is efficient and better regulations for real estate. As this will entail growth.