Around five per cent of Bulgaria’s property agencies have gone out of business in January, said Teodora Dimitrova, head of the local unit of international firm ERA Real Estate.

About 200 of the company’s 4000 partners shut down, giving the boot to some 300-350 employees, Dimitrova said, declining to predict how many companies will manage to weather the financial storm.

Around 3000 of Bulgaria’s over 5000 registered property firms will stop operations by the end of the year, Onik Latifian, chief executive of the Bulgarian and Macedonian divisions of international real estate company Century 21, forecast recently.

The crisis will hammer mostly small companies, with around 7000 people facing unemployment.

Springing up by the day amid buoyant demand and sky-rocketting prices before, in the last months of 2008 offices began to close, according to Dimitrova. Big firms are shaking up businesses and shutting branches while the small fry are forced to close as thin revenues cannot cover costs.

Registered realtors will strike an average of 17 deals per year, which is less than one and a half a month, Latifian said.

For comparison, about 70 per cent of Spain’s property agencies have shuttered down last year, Dimitrova said. The byproduct of the construction boom in the country, when homes sold like hot cakes in recent years, the consultants knew about property as much as shop assistants do, according to Dimitrova. Other countries like Sweden or The Netherlands, which impose tougher qualification requirements, have been less severely hit.

Housing prices have plummeted 40 per cent in January compared to the same month of last year, Dimitrova said.

Eighty-six percent of the real estate deal nowadays do not exceed 70 000 euro, with bank loans going no higher than 50 000, she said.

Source: Dnevnik