Latest Trends in Luxury Residential Real Estate

An interview with Deyan Kavrakov, CRE, CLHMS, CIPS, CEO of ADIS Ltd. made by Ivan Zdravkov, Nash Dom Magazine

1. Mr. Kavrakov, you are the only one Certified Luxury Home Marketing Specialist (CLHMS) in Central and Eastern Europe. Would you point out some of the main criteria for luxury home in Bulgaria and abroad?

I would like to point out those indicators and criteria which are summarized. Have in mind that there are variations depending on the market. The price of each luxury residential estate is determined by location. Which destination the society considers as prestigious? There are traditional destinations such as Spain, The Caribbean, New York, Los Angelеs, San Francisco, Florida, Miami, Mauritius, New Zeland and the Fiji islands. Other important criteria is the Gross External Area, at least 400 sq.m. up to 4000 sq.m. and more. Besides the living room, kitchen and other systems, the number of bedrooms should be min. 4 – master bedroom (suite), children’s bedrooms and guest bedroom. The number of bedrooms is also a frequently used criteria. When it comes to height – usually the exclusive residential property is 2-3 floors max. On the other hand, even apartments, situated on the upper floors in the urban environment - penthouses, duplex, maisonettes, triplex and so on are defined as luxury family homes.

The latest trend is to lessen the yard area and to increase the build-up area.

The construction technologies, defining a property as exclusive, are the most modern, energy effective, compatible with the environment and habitat of the individual consumer. Very often even the construction materials are considered in accordance to the healthy lifestyle of the particular owner.

The price range used in USA and Western Europe for luxury family home is over EUR 500 000. The professionals operating in that segment use a statistical indicator for defining a luxury property based on the individual property prices included in the upper 10 percent of overall home sales in certain town or area. The average price is used for defining a luxury residential estate. For Bulgaria and Sofia, in particular, the average price is approximately EUR 300 – 350 000. Because of the fact that the Bulgarian real estate market is still developing and dynamic, certain changes can be observed.

2. Which are the latest trends in the interior design and furnishing of luxury homes?

The latest interior design trends could be examined in 4 major categories: bathrooms, kitchens, additional premises and materials, colors and technologies.

A luxury finished bathroom means when there is a panel and at least 2 sinks, one for HER and one for HIM. This phenomenon has transformed into bathroom for HER and bathroom for HIM. The same trend can be observed in walk-in-closets. The number of bedrooms should correspond with the number of bathrooms and walk-in-closets. The showers and Jacuzzi bath tubs become larger and larger and more functional. One of the latest trends is the chromotherapy – Jacuzzi bathtubs with multi-color lights that change in accordance to their owner’s mood. Television has made its way into the bathroom – Jacuzzi bathtubs are offered with built-in LCD displays. There is a new bathroom accessory, called Wash TV or mirror with built-in TV monitor. He or she could shave or put make-up on and watch TV at the same time. When the television is off, it seemingly disappears, and the mirror restores its reflection. Sitting, massage and deep relaxation areas are implemented turning the bathroom in a home SPA. The current fashion trend in bathroom interior is transparent glass tiles in different colors. They let light through and are offered in combination with the traditional terracotta and faience.

With the kitchen becoming a home's central meeting place, more homeowners increase the number of kitchens – the second catering kitchen for entertainment and meeting guests comes into sight. It is connected to the large premises in the house. Big gardens have own outdoor kitchen. I’m happy because in Bulgaria there is such definition as „summer kitchen”. Situated in the open or under a roof, it has all necessary appliances – built-in grills, ovens, fridges, ice generators, microwaves and so on. It’s wide spread abroad to have a „mini kitchen” in the master suite of the house.

The current trend in additional premises is providing space for premise systems home control, usually located next to the kitchen. That is a multifunctional room, where the electronic systems controlling the house - energy effectiveness, humidity, curtains, air freshness, security and sound systems, are situated.

The division of all kind functional premises is considered with homeowners’ gender. Not only in the bathrooms, but in walk-in-closets and garage cells as well. HER garage is close to the kitchen, HIS – next to the living room. There are customized relaxation suites and rooms for special interests. HER – for fitness and yoga, HIS – for fine cigars or wine tasting. It’s compulsatory to have a self-contained building for the auxiliary staff.

As it comes to color, we observe the return of color kitchen appliances. The modern colors of kitchen appliances are gold or avocado green. White is old fashioned.

3. Mr.Kavrakov, could you tell our readers which are the latest trends in luxury home buying in Bulgaria and abroad?

In mature markets the luxury segment is between 3-5 % market share. Still it can reach up to 8 %. This rule applies to each developed industrial country and the trend is increase of this share. An upper-layer of mid-class is formed aiming at incorporating into the wealthy upper class. The middle class more and more affords purchasing second home with extras. The affordable luxury expression has emerged. For example, 10 years ago home theatre, home video or energy efficiency control system were considered luxury. At the moment they are wide spread and at affordable price.
In Bulgaria the luxury residential estates are between 3-5 % market share. However the trend is up-ward and will reach 8 %.


4. Do you have any tips or advice for people looking to buy a luxury home?

The prospective luxury home buyer has earned a significant fortune and knows very well the price and the know-how of money-making. He is extremely demanding, has good knowledge and approaches real estate agents or consultants with proven track records in property transactions with luxury homes for EUR 500 000 or more, professional history and reputation. In the area of real estate such segmentation is well-known for a long time - there are specialized networks, web and print media. The real estate agents are integrated in a worldwide referral networks. One of them is The Institute for Luxury Home Marketing, Dallas, USA. I have the honor and pleasure to be a member of this network. My advice for the clients is to contact well-known experts with long years of experience, practice and references from stable clients.

5. What are the future investment opportunities of such purchase?

The percentage of luxury homes purchases that are not good investments is very small. Usually, the people who can afford to buy an exclusive residential estate work with a team of analysts, lawyers and financial advisers.

6. Mr.Kavrakov, you are among the first group of Certified Luxury Home Marketing Specialists, invited to participate in an international advertising program of Wall Street Journal. Could you tell our readers the most interesting facts in the luxury residential estates in the past year?

The most expensive sale transaction for the last year is truly a record and amounts $ 70 mln. An estate in Palm Beach, USA, owned by Ronald Pullman and actress Elen Barkin., and sold to a construction entrepreneur from Virginia. Another record that is up to be released is the purchase of a luxury triplex on 5-th Avenue, New York, for $ 44 mln. Rupert Murdock is the buyer and the apartment is owned by one of Rockefeller’s inheritors – Lawrence Rockefeller.

7. Can you highlight the luxury home hotspots in Bulgaria and abroad?

A hotspot – Florida because of the weakness of the U.S. dollar and the exceptional flow of the European investors buying vacational properties for $ 600-900 000. Other fashionable place is Dubai which turns into the leading construction-investment and bank centre of the Arab world. The third destination is Eastern Germany where the interest of buyers is towards old estates and castles at very affordable price.

For Bulgaria I will point out the two parts of the Black Sea Coast as destinations with exclusivity potential– the endmost North and endmost South. The North because of the breathtaking sea views, the South because of the Mediterranean flavor undisturbed by dense construction works. It benefits from the close proximity to Turkey and Greece, only 2 hour drive from Thessaloniki, Halkidiki and Istanbul - one of the biggest megapolises in the world.

8. What’s ADIS’ position at the luxury home market and what are your future plans regarding that segment?

During the last 15 years the luxury segment attracts the attention of many people – investors and entrepreneurs. ADIS Ltd. preserved its market share as one of the leaders in the luxury homes segment. Our plans are related to desertification of the services offered to our Bulgarian clients. At present we offer properties all over the world. In order to satisfy the increased demand we launched new office in London and in mid-term plan - to open one in Washington and Dubai. That’s the way not only to meet the needs of our Balkan clients but also to respond the demand of these multinational places.