16 Jun 2023

Build Europe in Sofia: The Bulgarian housing construction with European partners

Build Europe is the organization that brings together over 30,000 national representatives of housebuilders. The history of Build Europe began in 1958 as an international association for scientific purposes, but from the very beginning the organization has been supporting the interests of entrepreneurs and housing developers in Europe. Today, Build Europe positions itself as a representative of entrepreneurs before the European institutions as well as before the interested parties.

The first visit of Build Europe to Bulgaria was at the invitation of the Bulgarian members of the association "Glavbolgarstroy" and BCC, who were also the coordinators of the event in the Bulgarian capital. During the meetings, a new president of Build Europe was also elected – Andreas Ibel, representative of BFW, the German Association of Independent Real Estate and Housing Companies. 


Andreas Ibel described the Bulgarian real estate market as "interesting": "The big problem is that the market is small and you have different currencies. And the small market opens up the need for a long-term partner. But it is a positive fact that the political picture in Bulgaria has been more stable for days. Not to be overlooked is your unique geographic location. Bulgaria is very interesting for investments because it is located next to Turkey and is part of the European Union. It is close to Ukraine as well".

Days before the Build Europe forum in Sofia, the European Central Bank warned of a possible chaotic fall in housing prices in the Eurozone. The reason – high interest rates on mortgage loans make housing unaffordable for households and unattractive to investors. 

"I think we have a common problem in Europe. The situation in Bulgaria is no different from that in Germany or the United Kingdom. House prices are rising across Europe. And they have been rising over the last year, interest rates too, and these two factors taken together make the perfect storm".

Andreas Ibel advises his colleagues in Bulgaria to work on a more attractive environment for investments, so that Bulgaria remains on the periphery of the "storm": "We live in really dynamic times and your future work will probably be related to dealing with such problems, especially migration to big cities and construction in those big cities. You should pay attention to the taxes that apply to real estate. For example, the transfer tax. I noted at the beginning that you have a different currency, but right now that may not necessarily be a bad factor. Smaller countries have smaller problems with regulations in the European Union." 

That is why the new president of Built Europe offers his Bulgarian partners support by sharing experience: "I think we can be useful to each other regarding the upcoming regulations in Brussels, in the EU. And we will have a chance to explore the local market as well".

Svetoslav Lyubomirov, CEO of "Glavbolgarstroy Holding" 

" Recognition for our active participation in Build Europe and our desire to exchange experience is the fact that only one year after we joined Build Europe, together with the Chamber of Builders we managed to make Bulgaria the center of such a large and significant international event", notes Svetoslav Lyubomirov, CEO director of "Glavbolgarstroy Holding": "Certainly, this is a recognition of the efforts we are making to be active at the European level as well, to take part in various events generated and influenced by EU policies in the field of construction and design. The members of the European association are here not only to hold this congress, but also to learn about both the potential and the opportunities, as well as the challenges and difficulties faced by developers and builders of residential and office buildings in the EU, and more specifically in Bulgaria. 

Build Europe has an individual approach, but protects the interests of its members at the European level. We discuss problems and our vision for the future, and in the end we were accepted into the Build Europe family.

The results that are achieved by the organization affect mostly the residential and office sectors, but as you know, in the beginning it all starts with construction. We are good partners with Build Europe and it is an honor and pleasure for us to have them in Bulgaria".

Relying on the GBS's rich experience and traditions in the construction sector, the Group envisages active investments in residential and office construction, which, regardless of market dynamics, is steadily growing. 

Part of the activity of "Glavbolgarstroy" includes the so-called investment construction of office and residential buildings, i.e. the entire process of preliminary research, purchase of land, design, construction and sales.

Although the volumes of this activity are small compared to the company's income from activities in other segments of construction, since 2005 GBS has a team and a specialized company - GBS Invest, which monitors market trends, has implemented and is currently implementing several projects.

"We maintain a presence in the market of construction and sales of residential, office and vacation buildings, but not at any price. We choose attractive locations and use first-quality materials so that our customers receive high added value", explains Svetoslav Lyubomirov. 

Where is the balance, also reflects in Sofia Terry Roydon, former president of Build Europe: "If we manage to beat inflation, housing markets will recover because interest rates will start to fall and the housing market will revive. But we will have a period of time of one, two, maybe three years when things are going to be very difficult.”

Terry Roydon's prediction is not about a sharp drop in prices: "Costs are still so high and rising that it's hard to imagine that property prices will fall significantly and that's another slightly unusual thing that has happened in the previous recession as prices fell significantly. During the recession, this time, again, across Europe, you see it, prices are relatively stable, prices are not falling. So people who are buying are still confident in buying their own home”. His advice to his Bulgarian colleagues is clear: "Money determines the direction - monitor the cash flow. Because what you can't afford is to run out of money, be careful with construction volumes”.

Roydon knows from his own experience that obtaining licenses and permits to acquire land for construction is the biggest problem. And of course the increasing regulations: “More and more costs are imposed on developers, which means that land is too expensive and you end up with house prices that are unaffordable. And that is why we constantly appeal to the responsible institutions in the different countries - that if they overdo the regulation, they will not get the housing that the population needs. And maybe we have some impact, but the general trend is to have more and more regulations in all countries”. 

The current president Marc Pigeon from the Federation of Construction Entrepreneurs of France (Fédération des Promoteurs Immobiliers de France) also saw common problems and a common future: "We heard the problems of our Bulgarian colleagues, which are more or less the same ones we face in Europe. The cost of construction has risen, growth is faster than people's incomes, and the main problem is housing affordability. The main problems are construction costs, interest costs, inflation, and also the lack of a buildable landscape. eg Ground Zero. We make these problems public to give a warning that unless something changes now, tomorrow things will get even worse. This morning we decided to write a letter to the attention of Mrs. Lagarde to say that if we follow the policy of high interest rates, the economy will be greatly transformed. But I believe that after the rain comes the good weather". 

Radoslav Kotlarov, executive director of "GBS Invest" gave Build Europe a positive point of view: "We cannot talk about a decline in the market unless we mean purely speculatively overpriced products. The price is determined by location and materials used, facade, landscaping, accessibility. There will always be customers for properties with balanced price and quality".