The property market in Bulgaria experienced almost a twofold decline in sales since the record high number of deals registered in 2007, according to official figures.

The data from the National Statistical Institute (NSI) and Registry Agency also shows that prices have lost a third of their peak value in 2007 and fewer building permits were issued.

And there is no sign of an improving market. According to local real estate brokers the downward trend is likely to persist throughout the first half of 2011.

The number of property deals in the country, including sales of land, residential real estate and buildings, has close to halved in the past four years, with deals in Sofia, Varna and Bourgas dropping between 5% and 9%, according to Registry Agency data.

Property prices are now about 33% lower than in 2008, according to NSI.

The average price of real estate in 2010 was 964 leva per square meter in with the most expensive prices in the capital city Sofia at 1,569 leva per square meter.

The lowest property prices were in the town of Kyustendil at 567 leva per square meter.

On average, real estate costs decreased by 10% in 2010, in line with projections made by major real estate agencies such as Address Foros and Colliers, which predicted that prices would stabilise in the middle of 2010, producing a gradual rise in sales.

Property deals in the third quarter of 2010 rose by 1,300 against the same period of 2009, but the number of real estate transactions in the October to December period was 6,000 less than a year ago.

In the first nine months of 2010, the country's construction sector continued to deteriorate as reflected by the lower number of building permits and a 50% decline in the total built up area. The number of buildings started was down by 18% on an annual basis.

Rural property prices were among the hardest hit by the global economic crunch and have plummeting to 2004 levels.

In 2010 alone, rural property prices declined by about 19%, according to a report from real estate agents Investor. The average price of properties sold through the agency last year was €1,600, just €300 euro more than their average six years ago.

The decline has slowed very slightly as the figures show that the fall in prices was 50% in 2009, Investor said. Among the hardest hit regions was Pleven, in the north of Bulgaria, when prices reached extremely low levels and are now among the country's cheapest.

But low prices has attracted buyers with interest increasing by 50% in the first half of 2010 and in some areas, most notably Bourgas, prices are rising again.

Currently, the average property in villages around Sofia sells for around €16,300, 15% down on the previous year. Varna and Dobrich average prices are at €13,600, some 8% down on 2009.

This article has been republished from Propertywire