The Bulgarian property market has had the most successful year in the past decade. We have witnessed such high positivism on the real estate market in Bulgaria’s capital Sofia, the big cities and the holiday property segment for the first time since 2007-2008, the Chief Operations Manager of real estate agency Bulgarian Properties Polina Stoykova told Radio Bulgaria and added:

“This applies in particular for the capital Sofia where housing prices have increased with 10%-15% year on year and the average price reached EUR 1,000 per square meter. Highest activity on the property market was registered between the spring of 2017 and August. In the autumn, the housing market slowed down. The number of property deals in Sofia is expected to see a 10% increase in 2017. There is huge demand of newly-built homes and of properties in early stage of construction as well. Of course, people prefer to buy fully-built homes, but due to the deficit of such, many of them sign contracts for purchase of properties during the initial stage of construction.”

In Polina Stoykova’s view, the huge demand on the real estate market is due both to the zero interest rates on deposits and the cheap mortgage loans:

“Currently, people are seriously encouraged to buy homes, because mortgage interest rates have reached historic lows and are currently around or below 4%. On the other hand, the growth in incomes in this country and the overall stability on the labor market also influence the property market. In Sofia, Plovdiv and other district centers economic growth is stable, employment is high and people earn high incomes. People living in these cities are encouraged to invest in properties, because rental market is also very strong and currently it is quite profitable to rent your property. Demand for rental housing is huge in most Bulgarian cities with universities due to the high number of foreign students. Moreover, the number of foreign nationals coming to live in Bulgaria or to work temporarily on various projects has also increased. That is why demand for rental properties has increased recently.”

Can we expect the Bulgarian housing market to cool down in 2018 since property prices increased drastically in the past two years or so?

“In my view, the demand on the housing market in 2018 will be similar to the one registered in 2017. We can talk about a drastic increase in housing prices if we compare the current prices with the prices during the crisis that hit the real estate market between 2010 and 2015. In other words, the housing market has already started to recover. Perhaps, housing prices will not continue to grow with the same rate in the future, but activity on the property market will definitely remain high and this market will continue to be very attractive for investments in 2018.”

In 2017 housing prices in Sofia’s suburbs have seen higher increase as compared to the prices of properties in attractive residential districts in the southern and the central part of the capital (Lozenets, Manastrirski Livadi, Sofia city center, etc). Housing prices in Lyulin and Obelya districts for instance have risen between 15% and 20% this year. “Of course, the property prices in those residential districts will not equal the prices in the most attractive districts, but one thing is for sure- housing prices are going up in all residential districts now. The same applies to the real estate market in the countryside. In the beginning, housing prices rose in the capital Sofia, but later we witnessed 10-%-12% increase in housing prices in the second-biggest city of Plovdiv and the average price reached EUR 750 per square meter. Then, prices in other big cities such as Varna, Blagoevgrad, Pleven, Ruse, Burgas, Veliko Tarnovo and Stara Zagora also went up. In Bulgaria’s third largest city Varna the average price reached EUR 900 per square meter and in Stara Zagora the average price in 2017 is at EUR 550 per square meter. Unfortunately, this trend has not yet reached the small towns and villages, where property market is still sluggish, because internal migration is mainly towards the big Bulgarian cities”.

The average price of the properties in the small Bulgarian towns ranges between EUR 300 and 400 per square meter, but there are exceptions in this segment as well and prices in some towns are higher due to their proximity to the large district cities for instance.

In 2017 we have registered an increased demand on the holiday segment as well. Property deals in the largest ski resorts Borovets, Bansko and Pamporovo have increased significantly, because people are tempted by the attractive prices in these resorts. For instance a lower-class property in the suburbs of Bansko ski resort costs between EUR 210-220 per square meter. “Such property is a good option for people who want to spend their weekends and holidays there. Next year, the Bulgarian citizens will buy more properties along the Black Sea coast, too”, Polina Stoykova added.

English version: Kostadin Atanasov