Abstract
This is the first edition in BMI' s new series of reports on real-estate
sectors around the world. We have sought to incorporate data and insights
from our reports on infrastructure and commercial banking, as well as our
own forecasts for the economies of the various countries that we survey.
Key issues - Bulgaria
We suggest that the following are the key issues to monitor for the Real Estate sector in the coming year or so:
- Growth in the construction sector, which is a major contributor to our assessment of the limits of potential returns.
- Stabilisation of the financial system, given that lending has been growing too rapidly.
- Whether the fall in the loan-to-deposit ratio has an adverse effect on the absolute level of lending, which needs to rise from a low level.
- A moderation in the pace of growth of property prices, which were rising at an unsustainably fast pace in 2008.
These conclusions are based on our proprietary Real
Estate/Construction Business Environment Rating (RECBER), the component
factors of which we discuss in detail. The conclusions are also set
against recent conditions in the commercial office market, for which we
have used office rents in major cities as a proxy and in the residential
real estate market, for which we have used housing prices as a proxy. A
major trend throughout all our real estate reports is that, mainly owing to
the global financial crisis, access to funding will be more important than
in the not too distant past. Accordingly, we have incorporated overviews
of conditions in the commercial banking sector, both globally and in the
region of each country. We have also looked at the issues that will drive
the fortunes of Real Estate Investment Trusts (REITs) over the coming
months.
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