Private housebuilding and housing markets in transitional economies: The case of Bulgaria

The primary aim of this study is to explore both theoretically and empirically the impacts of housing reforms in post-socialist countries on structures of housing provision. In exploring this phenomenon, it views housing provision systems as a set of institutions and actors organised in the process of promotion, production, marketing and consumption of housing as socially created and dependent on cultural, social, economic contexts. The research focuses on new housing provision for the home ownership markets with a particular emphasis on strategies developed by private housebuilders. The work, based on a comparative analysis of housing market dynamics in 12 countries in Central and Eastern Europe seeks to identify major patterns of change in owner-occupied housing provision and new housebuilding in the context of the transition from a centrally planned to a market economy. More specifically, it deconstructs the economic, social, and spatial manifestations of those processes through case studies of two local housing markets in Bulgaria. Although the focus of this research is on Bulgarian owner-occupied markets and private housebuilding, its broader objective is to contribute to the analysis and evaluation of new housing provision in the context of transition from central planning to markets. The principal conclusions of the research are that: (i) competition and penetration of the market in the housing provision system have transformed home ownership in post-socialist countries from a supply-driven into a demand-driven tenure; (ii) the new market-led housing provision systems have become more diverse and socially efficient with respect to consumer preferences, and the quality of the housing product; (iii) the linkage between rising house prices, escalating production costs and historically low levels of housebuilding, together with a growing affordability problem, are indicators of the growing crisis in these new provision systems and the lack of economic efficiency; (iv) it is not possible to improve the economic, social and dynamic efficiency of the housing provision system without corresponding changes in the framework affecting its structure and operation; more efficient forms of state regulation, designed to ensure the long-term supply of urban land and capital for housebuilding, are required to balance existing housing market imperfections and to enable competition in the market place.