THERE'S NO PLACE LIKE HOME
UN/ECE ASSESSES THE HOUSINGSECTOR IN BULGARIA
7 April 1997
Bulgaria is a nation of homeowners, yet new housing construction has virtually
ground to a halt. In 1980, almost 75,000 new homes were built in Bulgaria. But
in the 1980s construction activity started to decline, and by 1994 the annual
increase in new homes had dwindled to a paltry 8,700. These are some of the
findings just published by the United Nations Economic Commission for Europe
(UN/ECE) in Country Profiles on the Housing Sector, Bulgaria. This report is the
first in a series of country reports which examine the trends in the housing sector
in countries in transition and put forward recommendations.
Tenure structure of the housing stock, 1993
(per cent of total dwellings)
| |
Bulgaria a |
Western Europe b, c |
| Owner-occupied |
90.3 |
40-70 |
| Rental: |
.. |
.. |
|
| - State and municipal |
3.8 |
.. |
|
| - Departments and State
enterprises |
2.8 |
23-56 |
| - Other public |
0.2 |
.. |
|
| - Private rental |
2.9 |
.. |
|
| Other |
.. |
4-7 |
Sources: a NSI, Statistical Yearbook, 1993. b Statistics on Housing in the European
Community, The Hague 1992. c Data for 1990.
Investment in housing in some central
and east European countries
(as percentage of total investment)
| Country |
1980 |
1991 |
1993 |
| Bulgaria |
13.0 |
8.7 |
5.0 |
| Hungary |
17.8 |
22.3 |
14.8 |
| Poland |
20.9 |
27.8 |
22.2 |
| Romania |
9.3 |
10.1 |
5.9 |
Source: Annual Bulletin of Housing and Building Statistics for Europe
and North America, 1995, UN/ECE.
Housing sector reform in central and eastern Europe is proving painful.
Many stumbling blocks created by the transition process, such as high inflation,
remain. Moreover, housing policy has slipped down the political agenda in recent
years. And yet it is crucial, because its success or failure is directly felt by the
population at large.
The UN/ECE report found that in Bulgaria the problem is compounded by the
fact that the central Government has effectively withdrawn from most practical
and financial responsibilities for housing, but has kept a tight grip on decision-making. For instance, the central Government continues to control rents in the
public housing sector. However, these rents are well below costs; centrally-fixed
public-sector rents represent only 1 or 2% of average household income. As a
result the municipalities cannot afford to carry out even urgently needed repairs.
This could eventually threaten the future of the public housing stock. The
UN/ECE report, therefore, suggests that local and central governments should
share authority and responsibility for housing.
Individual housing construction and private ownership have traditionally
been more widespread in Bulgaria than in other countries in transition. As much
as 90% of the Bulgarian housing stock is owner-occupied. In general, Bulgarians
are well housed and it is expected that the housing stock will continue to be able
to meet demand. However, investment in private-sector housing has also
collapsed. Currently, Bulgarian households spend half their income on food, but
a mere 10 to 15% on housing (mostly on utilities). According to the
UN/ECE report, the lack of suitable financial institutions, such as building societies,
and of affordable mortgages, as well as the sharp drop in the population's
purchasing power, explain the collapse of private investment in housing. It,
consequently, recommends that the present mortgage system should be made
more accessible. The housing sector is also failing to attract large investors,
because house prices -- although rising -- have not kept pace with inflation. As
a result, the report concludes, the housing sector, which can be a major
contributor to economic growth, is actually holding back economic recovery in
Bulgaria.
United Nations Economic Commission of Europe, Country Profiles on the
Housing Sector, Bulgaria, United Nations Sales No. E.96.II.E.28 (English) or
R.96.II.E.28 (Russian).