One of the key factors determining the profitability of real estate investments is definitely a price component and a forecast price changes in the short and long term. Next, we briefly review the dynamics of changes in property prices in Bulgaria from 2005 to 2013, the article also describes quarterly change in the average cost of housing in 2014 and forecast for 2015.
Dynamics of real estate prices, 2008-2013
As in most resort of the States of Europe the cost of real estate in Bulgaria grew steadily until 2008. At the beginning of 2008, average prices peaked at a level of 1418 lion or €725,17 per square meter. And the total increase over the period 2000-2008 amounted to more than 300%. Rapid growth has been associated with a number of subjective and objective factors that contributed to a significant increase in demand on the Bulgarian housing. Among these factors we can highlight the improvement of the welfare of the local population, the increase of tourist flows on the background of the development of resort infrastructure of Bulgaria.
Due to the outbreak in 2008 of the world economic crisis, the price trend abruptly changed direction to the downside. The overall decline of the average price in 2013 in comparison with 2008 was 39% or 45.1% in real terms. The drop in average cost per square meter compared to the prior year was as follows:
- 2009 - (- 26,31%).
- 2010 - (-5,58% or -9,68 in real terms).
- 2011 - (- 6,16% or - 8,67 in real terms).
- 2012 - (of 1.4%, or -5,42% in real terms).
- 2013 the price dropped on 1,21%, but in real terms increased by +0,38%.
At the end of 2013 the average price per square meter of residential property in Bulgaria stood at 864,52 leva or £ 442,12. In Sofia, real estate has appreciated on average in 1439 leva or £ 736,32 per square meter.
According to the results of 2012-2013, the pace of falling prices declined significantly, which clearly testifies to the achievement of the price “bottom”, the beginning of stabilization and gradual transition of the housing market in the growth stage.
Dynamics of real estate prices 2014
Forecasts of experts, made in 2013, has come true, and for the first time since 2008 the prices on the real estate market began to grow. According to the Bulgarian national statistical Institute of the relative change in average real estate prices in 2014, with quarterly breakdown was as follows:
| The first quarter of 2014 | II quarter of 2014 | III quarter 2014 | IV quarter of 2014. |
| +0,22 | +0,33 | -0,06 | +0,07 |
The table shows the relative price change compared��Oia with the previous quarter.
As of January 2015, the average price per square meter in the regional centers of Bulgaria has increased by 0.5% compared with January 2014.
Forecast of real estate prices in Bulgaria in 2015
Experts predict stabilization of the Bulgarian housing market in the short term will continue. In the current 2015 prices will remain at last year's values or increase little. The reason for optimism is the continued growth of the Bulgarian economy, increasing income of the local population, as well as lower interest rates on deposits and mortgage loans. Rising demand from Western investors and buyers from Ukraine, Belarus and Kazakhstan is also evidence in favor of price increases this year 2015. The market growth in the long term will depend on the financial and economic situation in the EU and the Eastern European region.
So, the current situation in the housing market in Bulgaria is an additional incentive for those who plans to buy a property in this Balkan country.
