Average market prices of homes in Bulgaria's capital city of Sofia have fallen by 6.8 per cent in the span of 12 months, while the decrease in the third quarter of 2011 was 3.9 per cent compared to the quarter before, according to an index compiled by Raiffeisen Real Estate.

The survey data shows that average market prices for Plovdiv homes were 4.1 per cent lower than in Q3 2010 and prices in Varna were 3.6 per cent lower. Quarter-on-quarter, average home prices in Varna decreased by 1.4 per cent and those in Plovdiv just about escaped negative territory with a rise of less than 0.1 per cent.

Figures for the last two quarters reveal the diverging fortunes of Bulgaria’s largest cities in prices in the non-residential property market. Between quarters, prices in Sofia and Varna dropped by 9.6 per cent and 6.4 per cent, respectively. Plovdiv and Bourgas, however, registered respective increases of 2.5 per cent and 6.8 per cent. This segment of the real estate market in the capital includes deals for both retail outlets and space for office use, while retail property transactions account for most of the deal activity in other cities.

In recent quarters, there has been an increase in the number of transactions involving commercial sites in central locations, including properties in main shopping streets. However, the research by Raiffeisen Real Estate shows that this has been accompanied by a decline in the average size of the properties sold. This explains the situation with average non-residential prices, as well as the figures for Bourgas and Plovdiv.