In recent months, the real estate market in Bulgaria has significantly strengthened. Currently, demand for housing exceeds supply, which is causing apartment and house prices to rise. What is driving this trend, and what can we expect in the future?
How is the housing market in Sophia?
The real estate market is stabilizing. However, there are still fewer listings than buyers. As a result, housing prices rose at the end of the third quarter of 2024, but this growth has now begun to slow.
A so-called “real estate bubble” occurs when property prices rise sharply due to high demand. Currently, this is not happening in Sofia, as the rate of housing price increases is gradually slowing down. Selling an apartment or house in Bulgaria remains profitable and quick.
What causes these changes?
One key factor is the large household savings held in banks (over 80 billion BGN). Currently, banks maintain a 12% minimum reserve. When Bulgaria joins the Eurozone, they will be required to lower this reserve to 1%, releasing funds into circulation through lending.
Experts predict an increase in loan interest rates. Buyers will still be able to obtain loans, and housing demand will remain high. According to NSNI Chair Galina Maksimovna, demand in Sofia is equally strong for both personal housing purchases and investments.
Some analysts expect housing prices to rise. However, according to the manager of the “Sofconsult” real estate agency, the situation is balanced, and no significant changes are expected after Bulgaria joins the Eurozone.
Learn more about how to sell real estate during the off-season.
- Interest rates and housing prices are expected to remain stable.
- For mortgage lending, the central bank has set restrictions: the loan amount cannot exceed 85% of the property’s value, monthly payments cannot exceed 50% of the family’s income, and the loan term cannot be longer than 30 years.
- Experts do not foresee any sharp price changes in the near future.
Learn more about housing price growth in Sofia and Ruse.
