Nikola Stoyanov: A luxury real estate market exists but demand is limited

Nikola Stoyanov is Managing Director and partner in Lux Imoti, a real estate agency dealing with marketing and sales of Bulgarian and foreign prime properties. Mr. Stoyanov is also the founder and partner in property management company Property Managment.BG, furnishing and interior firm Furnish.BG and real estate development company Chobanov & Stoyanov Ltd.

The entire real estate market is undergoing a segmentation process as there has been firm demand for prime properties in 2008. This demand is a natural consequence of the improvements in the economic climate, the vast prospects that now seem to rise before the people in the country and the need for better living conditions.
Investment in luxury properties bears relatively low risks, because luxury properties around the world tend to be less affected by economic cycles. On the whole, the real estate sector sometimes faces ups and downs but the truly quality projects are constantly moving upwards.
We can hardly speak of strong demand for luxury property in Bulgaria due to the lack of sufficient number of wealthy people, the main potential target clients for these properties. Demand is definitely here but is limited. Wealthy buyers are sensible people and would only buy a property when the investment is worth it. This means they expect high quality, perfect service and reasonable prices, which would correspond to the property.
For high-end projects developers should have high qualification and professional teams. They must have knowledge of the market and understand the attitudes of potential clients so that to be able to design a product with good balance between location, quality, convenience and price. In addition, developers must perform all their duties within the respective deadlines. It is typical for luxury properties to be sold as ready-to-move-in products, when they are entirely completed, and not during initial construction stages. Buyers are willing to pay high prices only once they see that properties are of high quality.
Therefore, a small number of developers have the courage to jump into such ventures. The luxury real estate segment is definitely destined for financially stable and professional companies, which have a brand and history behind them.

Read more:
Residential market: luxury is in demand!
Konstantin Bobchev: Luxury residences reach a healthy balance between price and quality
Vesela Ilieva: Prime property is unique and special
Stoyan Hristov: The market needs rental properties
Rita Yotova and Mincho Pachikov: Clients are becoming more exacting
Arch. Vesela Miryanova: Sofia lacks symbolic residential buildings