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The price of agricultural land may fall next year if COVID-19 does not disappear, predicts Agrion
The world began to lose its fear of the pandemic. With the vaccines, hope returned that soon our daily life could return to normal. However, after COVID-19, there is something that is no less scary: the economic crisis.
In times of crisis, there has always been a refuge for Bulgarians – real estate. Whether it is a field in a town or an apartment in the city, the Bulgarian prefers to keep his money in a property than in a bank.
In recent years, agricultural land has become firmly established as an alternative to urban investment. With the development of the market, the owners realized that they can be sold as quickly as the apartments. On the other hand, the price of land is constantly growing and at a much faster rate than that of real estate in the city.
What were the trends in farmland prices and what to expect in 2021, say Agrion experts.
Land prices
The pandemic and climate change have created serious problems for agriculture in 2020, especially in Dobrogea. However, Agrion experts do not report a decline in transactions. On the contrary, there is a constant increase in sales and one of the reasons is financing for the purchase of a second home or other property.
In the real estate market at the moment there are many people who want to buy a home, experts say. Market findings and rumors of falling property prices are often the reason they embark on the search for a deal. And the easiest way to finance a purchase is to sell hereditary farmland. About 20 decars of a village can often generate enough income to buy a house in the village or cover part of the price of an apartment in the city.
Boom in desire for rural real estate
The higher demand for rural properties leads to a higher demand for fields near the settlements. In general, the clients are young people who want to have a holiday home or move out of their apartments in the city.
Buying a country house often leads to a resurgence of interest in agriculture. Young people are interested in organic farming, clean food and the opportunities to produce it.
This awakens the demand for agricultural land close to the settlements, in the mountains or by the sea.
The market engine are also the deals with ideal parts.
Often, the owners are entire families who can hardly make a common selling decision. For this reason, some of them prefer to sell their participation without headaches with relatives and co-owners. For all of them, Agrion has a solution, even in the most complicated cases. The company’s lawyers have also cut a Gordian knot between 30 heirs, some of whom live abroad.
Companies seek fields to invest
For companies, the crisis is not only a challenge, but also an opportunity to profit. That is why Agrion brokers report serious interest in exclusive properties with investment potential, which have recently been actively offered by the company.
The demand for plots is high because they are located in communicative places such as roads, big cities, spas and investors see enormous potential in their development.
The grounds are suitable for hotels, warehouses, businesses, holiday villages.
The plots are also an opportunity for those looking for a long-term investment. The area of the properties ranges from one to over 1000 decars, making them perfect for the construction of small sites and large production sites or TIR parking lots, for example.
Interestingly, the interest is shared between investors and more and more real estate agencies looking for plots for their clients.
Leasing and financing: helping farmers
The pandemic and climate change have forced landowners and farmers to be flexible. As the largest company in Bulgarian agriculture, Agrion has renewed and improved the conditions of its financial products to help farmers.
With the new conditions, each Agrion land can be purchased in installments, up to 100%, without deductible. This is a great relief for farmers who have the opportunity to buy property without disturbing their financial planning, or to obtain the necessary financing without depriving themselves of assets.
The reimbursement depends on the specific needs of the renter. Farmers can choose how many installments and when to pay their lease, taking these payments into account with their income per period.
Despite the fragile hope, 2021 still brings many concerns and fears for farmers. It is possible that the harvest will suffer another bad year and the pandemic will continue in our country.
Therefore, more and more farmers will seek flexible products that do not force them to meet tight payment deadlines or unaffordable quotas that threaten to choke their business, Agrion experts say.
Trends for 2021
The market is currently in a delicate balance between supply and demand, but also between people’s fears and hopes. This means that next year the prices of agricultural parcels may fall if the pandemic and the climate are against us, or jump sharply in case of a favorable evolution of the situation.
On the other hand, the economic crisis is likely to force many people to register their grandparents’ properties and look for opportunities to sell them in order to survive the year or invest in something that generates income, say Agrion experts.
They advise those who urgently need money to sell now that prices are relatively high, because next year that may not be the case.
Those who want to invest in land should look closely at the statistics. Over the last decade, the price of agricultural land has increased 600%. However, this has not been a constant over the years. There are periods when it has gone downhill and when it has grown rapidly.
However, it is certainly an asset that will not lose its value in the long term.
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