Many of our clients are interested in whether real estate will rise in price in 2022. Is it worth buying an apartment and when is it more profitable to sell it? Already now we can say unequivocally that real estate prices in Bulgaria in 2022 will continue to grow. And there are good reasons for such predictions. We will describe them below, but for now let's look at what happened in the residential property market in 2021.
Real estate value dynamics in 2021
By the beginning of 2021, the Bulgarian real estate market has almost completely recovered after the shock events of 2020. The volume of transactions returned to pre-crisis levels, and in some regions and market segments even exceeded the indicators of 2019.
The cost per square meter did not stop growing throughout the entire pandemic. Thus, according to the Bulgarian Statistical Institute, the growth in house prices in three quarters of 2021 compared to the same indicators last year was:
- 1 quarter (+ 7.5%);
- Q2 (+ 9.1%);
- Q3 (+ 8.7%);
- Q4 (data not yet released).
These are the average figures for Bulgaria. In some regions, such as major cities in the country and popular resorts, prices rose in double digits. Some types of highly liquid properties have risen in price by more than 20%.
Read more about the trends in the real estate market in 2021 .
5 reasons why Bulgarian real estate will rise in price in 2022?
Many experts agree that the growth of the price level on the Bulgarian housing market will continue in 2022 and until 2024. And there are all the prerequisites for this:
- Demand exceeds supply. For several years now, the demand for housing has significantly exceeded supply, and this imbalance in the Bulgarian real estate market will continue in 2022-2023. Demand is fueled by the factors described below.
- Low profitability of bank deposits. Recently, more and more Bulgarian banks are introducing payments for large amounts of deposits, making keeping money in a bank unprofitable. Against the background of negative profitability of term bank deposits, real estate becomes a profitable investment: it can be rented out with an annual yield of 5-7%, and after a few years it can be sold at a higher price.
- Global inflation and a sharp rise in prices for building materials. We can safely call 2021 the year of price growth. And the prices for everything and everywhere are growing. Foodstuffs, cars, machinery, and fuel are becoming more expensive. But building materials have risen in price especially significantly - on average by 20-30%, which means that the cost of construction has increased, which will inevitably lead to an increase in real estate prices. First, new buildings will rise in price, followed by prices on the secondary market.
- Increase in incomes of the population in the country and the availability of mortgages. Amid inflation, the level of wages in Bulgaria is growing, which increases the number of those who can afford to buy real estate, especially when mortgage lending is available.
- Lack of quality properties. Bulgarian realtors note an increased demand for quality housing. Moreover, many are no longer interested in old small apartments, but in more spacious apartments in modern residential complexes. In the context of growing inflation in construction, developers do not have time to meet the growing needs of buyers, which puts a lot of pressure on prices.
So, according to experts, the value of real estate will increase, the average annual growth in 2022 will be 10-15%, depending on the region and segment. How do buyers and sellers act in this situation?
If you are planning to buy a house or apartment, do not postpone the purchase indefinitely. At the same time, take your time and calmly search for the object that suits you.
Sellers are now in a better position, as they can more easily find a buyer and sell their apartment at a comfortable price for themselves. At the same time, you need to remember that liquid real estate is becoming more expensive in the first place and be ready to negotiate with real buyers.
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