December 27, 2024
Property Market Forecast: Euro Adoption Likely to Push Prices Up in Bulgaria

If Bulgaria adopts the euro in July 2025, property prices are expected to rise further, according to Yavor Peychev, executive director of the real estate agency "Imoteka." He predicts that finding buyers for properties priced higher than the market value will become more challenging. While sellers have dominated the market in recent years, taking advantage of a general sense of optimism and higher prices, this dynamic is likely to shift in 2025.

Peychev forecasts that in 2025, the balance between buyers and sellers will be more equal. Buyers will no longer feel pressured by continually rising prices and will become more selective in their property choices. They will be particularly cautious about homes priced above their real value. As a result, sellers, especially those in the secondary market, will need to remain competitive, with accurate property valuations being critical for securing deals.

The agency anticipates a stable market in 2025, with the number of transactions holding steady. In regional centers, property prices are expected to see modest single-digit increases. However, in areas experiencing higher demand from both buyers and construction developers, price growth could reach double digits.

December 23, 2024
Housing Prices in Bulgaria Jump 16.5% in Third Quarter of 2024

In the third quarter of 2024, housing prices in Bulgaria saw a notable rise of 16.5% compared to the same period last year, according to the National Statistical Institute. When compared to the previous quarter, the increase was slightly below 4%, with the largest price jumps occurring in Sofia and Varna, where prices surged by over 5%.

The rise in housing prices was observed across both existing and newly built properties. Existing homes experienced a price increase of 3%, while new homes saw a sharper rise of 5.6%. Among the cities with the most significant price changes were Stara Zagora and Burgas, where prices increased by just over 4%.

However, Ruse was an exception, seeing a nearly 6% decline in housing prices. The Southeastern region recorded the highest price growth for new properties, with an increase approaching 7%.

December 17, 2024
Sofia Real Estate: Rising Demand, Limited Supply, and Euro Impact in 2025

The real estate market in Sofia remains robust as the year draws to a close, with a notable increase in sales, up by around 10% from the previous year, according to Momchil Krastev, a broker at one of the leading agencies in the capital, in an interview with Radio Sofia.

There is a growing demand for ready-to-move-in homes, both in new construction projects and on the secondary market. Krastev pointed out that the availability of such properties is becoming limited. Factors such as low mortgage interest rates, improved living standards, and rising average wages are contributing to the active market conditions.

Krastev also noted that, although building permits are issued annually in large numbers, only about half of those projects are actually being developed. This creates a gap in supply. In 2023 and early 2024, Sofia saw around 30,000 real estate transactions, with newly built properties accounting for a smaller portion of these deals.

Buyers are increasingly leaning toward new properties, with many of these transactions going above the average price range. The broker highlighted that, compared to renting, purchasing real estate tends to be more financially advantageous in the long run, as buyers build equity through their mortgage payments, rather than paying rent. In the short term, however, renting can be a more viable option, especially for individuals with dynamic life situations.

When it comes to investment choices, Krastev also compared purchasing a plot of land on the outskirts of Sofia to buying a ready-made property, such as a ground-floor apartment with a yard. Both options, priced similarly, offer different advantages depending on the buyer’s preferences.

Looking ahead to 2025, Krastev indicated that the upcoming introduction of the euro could have an impact on real estate prices in Sofia, making it a key factor to watch for market trends.

December 9, 2024
Housing Prices Rise in Sofia, but Affordability Improves

Housing affordability in Sofia has improved since the pandemic, making it one of the few capitals in Central and Eastern Europe (CEE) to experience this positive trend, according to a report by Colliers International. The consultancy examined housing affordability from two key perspectives: the ability of an average salary earner to secure a loan from a bank based on monthly payments equaling 30% of their income, and the ratio between average apartment prices and annual incomes. In Sofia, strong wage growth has played a crucial role in enhancing affordability, with average wages nearly doubling compared to 2024.

In contrast, Bucharest has seen a slight improvement in the ratio of house prices to income, though high interest rates have diminished the favorable lending conditions available to borrowers. Meanwhile, the situation has worsened in other CEE capitals like Prague, where mortgage rates have risen significantly and housing prices have outpaced the improved household incomes. Other capitals, such as Bratislava, Warsaw, and Budapest, have also seen a deterioration in affordability. In these cities, higher mortgage rates, coupled with significant increases in home prices, have pushed affordability further out of reach.

Colliers notes that in most cases, homebuyers are two-person households with combined incomes, making it easier for them to manage mortgage repayments compared to single buyers. Additionally, those with higher incomes may find it easier to secure more favorable loan terms, with some banks allowing up to 40% to 50% of household income to be allocated to loan repayments.

In terms of prices, Sofia's housing market has experienced a 60% increase in home prices since 2019, with the average cost per square meter reaching €1,600 in 2024. By comparison, Bucharest’s average home price has risen by 48% to €2,150 per square meter. However, housing in Prague remains the most expensive in the region, with an average price of €6,295 per square meter, reflecting a 69% rise since 2019. Other cities like Warsaw, Bratislava, and Budapest have also seen substantial price increases.

Renting a home in Sofia is comparatively more affordable, with the average rent per square meter at €7, marking a 40% increase since 2019. Bucharest follows with €10 per square meter. Other CEE capitals, such as Warsaw and Prague, report significantly higher rental costs, with Warsaw leading at €19.60 per square meter. Despite these increases, Sofia still remains the most affordable rental market in the region.

The demand for residential properties in CEE countries remains high, driven by overcrowded housing situations in places like Romania, Bulgaria, Poland, and Slovakia. Economic stability and relatively lower interest rates have also contributed to this demand. In Poland, the housing market has reached near-historic peaks, while Romania, Bulgaria, and Hungary continue to see robust demand for homes.

Construction activity has surged across the region in response to the growing housing shortage. Traditional property transactions are slowing, but pre-financing deals and partnerships between construction companies and institutional investors have risen. These collaborations often involve profit-sharing or pre-financing models that may not always be fully captured in official market data, potentially underestimating actual market activity.

In the rental property sector, Poland and the Czech Republic are leading growth, particularly in student housing. Poland’s student housing market has expanded by nearly 70% year-on-year, and both Warsaw and Prague are seeing large increases in the number of rental units. Warsaw plans to almost double its rental stock in the near future, while Prague has 2,000 units currently under construction. Meanwhile, Bucharest is also experiencing strong rental market growth, with over 3,000 units in development.

December 9, 2024
Real Estate Market in Sofia Remains Active at the End of 2024

The real estate market in Sofia continues to show growth, with a 10% increase in sales compared to the previous year. This was shared by Momchil Krastev, a broker at one of the leading real estate agencies in the capital, during an interview with Radio Sofia.

High Demand for Completed Properties

Krastev highlighted that:

There is a growing demand for completed, move-in-ready properties, both in the new construction segment and on the secondary market.

The supply of such properties is becoming increasingly scarce.

Low mortgage interest rates, rising living standards, and higher average wages are driving market activity.

New Construction vs. Secondary Market

The broker noted that the number of actual construction starts is twice as low as the number of building permits issued annually, creating a supply shortage. Data from 2023 and early 2024 show around 30,000 transactions in Sofia, with new construction making up a relatively small portion of them.

Shift from Older to Newer Properties

Krastev observed that buyers are increasingly favoring newer properties, often striking deals above the average price levels.

Renting or Buying?

According to Krastev, the choice between buying and renting can be made by comparing the initial down payment and monthly mortgage installments to rental costs:

Renting might be more advantageous in the short term, especially for those with a dynamic lifestyle.

Buying is more cost-effective in the long term, as homeowners gradually pay off the property’s value instead of paying rent.

Land or Finished Property?

Krastev also compared two options:

Investing in a plot of land in the outskirts of Sofia to build a house of around 100 sq.m.

Purchasing a completed property in the city, such as a ground-floor apartment with a yard, at a comparable price.

Outlook for 2025

Looking ahead to 2025, Krastev mentioned that the upcoming adoption of the euro in Bulgaria may impact real estate prices.

December 1, 2024
Two Bulgarian Cities Shine in Europe’s Budget Housing Rankings

Two Bulgarian cities, Plovdiv and Burgas, have been ranked among the most affordable locations for purchasing homes in Europe, according to a report by a real estate company. The ranking evaluated mid-sized cities known for their quality of life and notable landmarks while excluding capital cities.

In Plovdiv, the average cost of a 100-square-meter apartment is approximately 131,000 euros, while in Burgas, the figure stands at around 136,000 euros. These prices place the two Bulgarian cities among the top 10 most affordable in Europe.

Several Romanian cities also feature prominently in the rankings. Oradea, located near the Hungarian border and noted for its rapid economic and cultural growth, has an average property price of 165,000 euros for a 100-square-meter apartment. Sibiu, known for the ASTRA Museum Complex—the largest open-air museum in Europe—offers similar-sized properties for 153,000 euros. Craiova, home to the expansive Nicolae Romanescu Park, has an average property cost of 148,000 euros.

Other cities included in the list are Patras in Greece (161,000 euros), Chisinau in Moldova, Tuzla (166,000 euros) and Mostar (128,000 euros) in Bosnia and Herzegovina, and Bitola in North Macedonia, where average property prices are particularly low at 91,000 euros. These cities offer not only affordable housing but also cultural and natural attractions, making them attractive options for prospective buyers.

November 30, 2024
Why Buying a Home in Sofia May Be More Cost-Effective Than Renting

The decision to buy or rent property in Bulgaria's major cities, particularly Sofia, is influenced by various factors, with real estate experts suggesting that buying remains more advantageous than renting in the long term. Mortgage payments for purchasing an apartment in Sofia are typically similar to monthly rent, making homeownership an attractive option, especially in light of rising property prices. Real estate brokers emphasize that for individuals who intend to settle in a specific neighborhood for the long term, buying a home is often a better investment than renting. After the mortgage term ends, homeowners no longer have to make monthly payments, while renters will continue paying indefinitely, which may become burdensome, particularly in retirement when their income is lower.

However, renting remains a practical choice for those still in the early stages of their career, particularly for individuals who are uncertain about their long-term plans, such as those who have just completed their education or are unsure if they will stay in Bulgaria or move abroad. Renting also provides flexibility for those relocating to a new city, allowing them to explore different areas before committing to a permanent residence.

For example, the monthly rent for a three-room apartment in a gated community in Sofia—spanning 130 square meters and with two bedrooms—amounts to approximately 1,700 euros. The selling price for such an apartment is around 400,000 euros. At current interest rates, with a 20% down payment and a loan term of 20 years, the monthly mortgage payment equals or slightly exceeds the rent. However, with a higher down payment or a longer loan term, monthly payments can be less than the rent. This suggests that while renting and buying may have similar short-term costs, purchasing a home offers long-term benefits, such as eventual ownership of the property without ongoing payments. In contrast, renters will continue to pay indefinitely, which can become increasingly difficult in old age, when lower income levels may necessitate moving to a smaller, less desirable apartment.

For many Bulgarians, owning a home is a primary goal. If an individual can afford the down payment—typically around 20%—buying a property is often seen as a wise financial decision. However, the high cost of both property prices and rents makes it challenging for those without sufficient savings to either buy or rent comfortably. As a result, many people are forced to allocate a large portion of their income to housing, which limits their financial flexibility in other areas.

November 17, 2024
Strong Credit Activity and Rising Incomes Drive Up Housing Prices in Bulgaria

In the second quarter of the year, the housing price index in Bulgaria increased by 15.1% year-on-year, slightly lower than the 16% rise in the first quarter. Both new homes and existing properties saw price increases, with new homes rising by 15.6% and existing ones by 14.8%. This trend was also evident in the six largest regional cities, where a notable acceleration in price growth was observed in Ruse, Burgas, and Stara Zagora. These findings are detailed in the Bulgarian National Bank’s quarterly publication, Economic Review.

Several factors are contributing to the rise in housing prices. Increased household incomes, strong lending activity, and historically low annualized interest rates on new home loans have been significant drivers. Additionally, the limited options for investing savings, given negative real interest rates on deposits, are also pushing more people toward the housing market. The volume of completed sales transactions has also surged, rising by 26.2% compared to the previous quarter, alongside an annual increase in the cost of construction for new buildings.

However, despite these positive factors, there is some indication of a limit to how much housing prices can continue to grow. A weakening in households' enthusiasm for purchasing new homes has been observed, which could moderate price hikes. The house price-to-rent ratio, a common indicator of housing overvaluation or undervaluation, remains 43% higher than its long-term average. This suggests that households are purchasing homes for reasons beyond immediate financial returns, such as the anticipation of future capital gains or viewing housing as a stable store of value amidst negative real interest rates.

The Bulgarian National Bank’s macroeconometric model estimates a weaker than expected deviation in current housing prices from their long-term equilibrium, at just 15.6%. This is largely attributed to the combination of growing household incomes and the availability of affordable housing loans, making housing more accessible and contributing to the upward pressure on prices.

November 16, 2024
Sofia Office Market: Growth in Rental Rates as New Developments Lag

Sofia's office market has experienced moderate rental activity over the first nine months of this year, with a total leased area of just over 130,000 square meters. This figure is above the five-year average, although the distribution of lease types has remained consistent. According to an analysis by Cushman&Wakefield Forton, contract renewals continue to represent approximately 40% of all deals, followed by tenant relocations. The low share of new tenants and lease extensions suggests limited opportunities for organic growth and new space absorption, even though the overall transaction volume is returning to pre-pandemic levels.

The demand for office space is primarily driven by IT and business process outsourcing (BPO) companies, though many are optimizing their space due to the rise of hybrid work and downsizing efforts. Despite this, the market remains stable, with the amount of vacant space holding steady for consecutive quarters. This stability is largely due to the limited completion of new office spaces and the muted demand in the market.

Projects under construction as of the third quarter total 178,000 square meters, with expectations for further growth in the coming months. Some new developments are planned in the areas around Paradise Center Mall and N.Y. Blvd. Vaptsarov, but in the third quarter, only one new building was completed near Bulgaria Blvd. The net absorption of office space in the third quarter was just 7,000 square meters, bringing the total for the year to slightly over 45,000 square meters—well below pre-pandemic levels.

As for rental rates, Class "A" office spaces in the most desirable locations in Sofia saw a slight increase in the third quarter, reaching 18 euros per square meter. This uptick is attributed to the high occupancy rates of high-tech buildings in prime locations. Rent for well-located office spaces along key roads remains in the range of 14 to 17 euros per square meter. Despite fluctuations in rental rates, the yield from prime office spaces in Sofia remains stable at 7.75%, consistent with the previous period.

November 5, 2024
Rent Consumes 45% of Minimum Wage in Bulgaria, Reflecting EU-Wide Housing Struggle

A recent analysis from the European Institute of Trade Unions, highlighted by the European Confederation of Trade Unions, reveals that low-wage earners in most EU countries spend at least a third of their monthly income on rent. This data comes just before Dan Jørgensen’s hearing in the European Parliament, where he will be considered for the role of the EU's first housing commissioner. Jørgensen, if appointed, will be tasked with implementing an "affordable housing plan," a priority set out by European Commission President Ursula von der Leyen.

According to the analysis, workers on the minimum wage in 14 EU countries typically spend 35% or more of their income on renting a property with up to two bedrooms. In some cases, housing costs are even higher. For instance, in the Netherlands, Ireland, and Luxembourg, low-wage workers spend roughly half of their income on rent, while in eight other member states, rent absorbs 40% or more of their paychecks.

In Bulgaria, minimum wage earners spend an average of 45% of their income on rent. This figure is based on national averages, and actual rent costs may be even higher in cities where job opportunities are concentrated. The situation reflects a broader trend across the EU, where rental costs have surged by as much as 200% over recent years, according to Eurostat data. In response to these pressures, many Europeans have resorted to cutting back on essential spending, including food, to afford their rent or mortgage payments.

November 3, 2024
Strong Demand and Price Growth Characterize Bulgaria's Property Market

The Bulgarian real estate market has seen a notable increase in both prices and transaction volume in the past quarter, according to real estate broker Dimitar Kalajjiev in an interview with Radio "Focus." He highlighted that the current demand for properties surpasses the supply, maintaining strong interest in home purchases. Kalajjiev described this trend as a natural and expected occurrence rather than indicative of a "bubble" in the market, asserting that such dynamics are typical.

He compared the current situation to the period following the economic crisis of 2012-2013, when property prices were exceptionally low. For instance, in Sofia's Gotse Delchev district, prices dropped to around 350 euros per square meter, whereas they have now surged to between 1,700 and 1,900 euros per square meter. Kalajjiev considers this price level consistent with the average values seen in European capitals, branding them as "normal prices."

Kalajjiev noted that property affordability is at its highest in the past 15 years. He pointed out that while prices are currently 20-30% higher than in 2008, incomes at that time were three to four times lower, and mortgage rates were five times higher. The present-day lower mortgage rates are bolstering the strong demand for properties, attributed to increased competition among commercial banks. He explained that Bulgarian buyers tend to be conservative, with only about 40% of transactions being financed through credit, a relatively modest figure.

The broker observed that the majority of market offers, around 85%, fall within the middle segment. The most sought-after properties are two-room apartments ranging from 55 to 65 square meters and three-room apartments measuring between 90 and 100 square meters. These sizes are particularly appealing to young families, who form the largest group of buyers. Conversely, larger and more luxurious properties face greater challenges in selling as they often exceed the psychological price thresholds for buyers.

While there are no significant issues with property supply, Kalajjiev mentioned that the limited inventory in the secondary market poses a challenge. He pointed out that although the buyer profile is consistent across larger cities, market dynamics differ. In Sofia, the market is a trendsetter; if it experiences a downturn, the effects will ripple out to smaller towns more significantly. In the capital, around 70-80% of transactions involve credit, compared to smaller towns where this figure is lower.

Inflation is another factor that Kalajjiev believes supports real estate values. He remarked that property acts as a safeguard against money depreciation, allowing investors to preserve their wealth. Looking ahead to Bulgaria's potential accession to the Eurozone, Kalajjiev anticipates a possible rise in property prices and some speculative behavior from market participants. He noted that while some may attempt to speculate on prices, the market typically self-regulates.

Joining the Eurozone could also bring changes to interest rates, aligning them with those of other member states. However, Kalajjiev predicts that low interest rates will persist for at least the next three to four years, which should sustain strong market interest. He also expects an influx of interest from external investors with the country's Eurozone entry, but emphasizes that a market predominantly driven by Bulgarian buyers is more stable and predictable, mitigating the risk of excessive speculation.

November 2, 2024
New Trends in Bulgarian Real Estate: Larger Homes in High-Demand Areas

The Bulgarian real estate market has remained stagnant, reflecting last year's levels, according to Alexander Bochev, chairman of the National Real Estate Association (NREA), in an interview with BTA. He discussed the latest data from the Registration Agency regarding transactions in the third quarter and the upcoming October 30 celebration of Real Estate Brokers and Agents.

Notably, larger cities, especially the coastal regions of Varna and Burgas, have seen a rise in transactions. This trend indicates a shift in the real estate market from smaller settlements to urban areas, aligning with Bulgaria's demographic and economic patterns. Bochev anticipates that the final quarter of 2024 will yield transaction levels comparable to the same period last year, with an estimated 62,368 sales. If this trend continues, total sales for the year could range between 215,000 and 216,000, similar to 2023's figures.

Regarding housing prices in 2025, Bochev expects the current upward trend to persist, projecting an increase of over 10 percent annually. However, the third quarter saw a decline in property sales compared to the previous quarter, with major cities like Burgas, Varna, Plovdiv, and Sofia experiencing an average drop of around 11.3 percent. Bochev noted that the third quarter typically witnesses lower activity due to the holiday season, reflecting the recent data from the Registration Agency.

Despite the seasonal downturn, the overall stability of the market remains evident, with a slight sales increase observed in the first nine months of 2024 compared to the same timeframe last year. Specifically, the first quarter experienced an average sales growth of approximately 11 percent year-on-year, while the second quarter reported a growth of 0.02 percent, followed by a slight drop of 0.25 percent in the third quarter.

The market conditions are favorable for activity, with stable interest rates on loans and deposits and a low unemployment rate providing confidence for long-term loan repayments. However, Bochev attributes the current market stagnation to uncertainty surrounding Bulgaria's potential entry into the Eurozone. He believes that prices may rise following this accession, or remain stable if entry does not occur.

Bochev summarized the past four years of Bulgaria's real estate market, noting that while overall sales have seen a slight decrease compared to previous years, property prices continue to rise by an average of 10 to 15 percent, with more pronounced increases in major cities. In Sofia, the demand for larger properties remains strong, particularly in neighborhoods known for family-friendly amenities. Conversely, areas near educational institutions attract interest in smaller apartments from students and young professionals.

New construction in Sofia is particularly active in neighborhoods such as "Manastirski Livadi," "Malinova Dolina," and "Ovcha Kupel," where there is still room for development. In contrast, neighborhoods with limited availability, such as "Oborishte," "Lozenets," "Iztok," and "Ivan Vazov," are experiencing price increases in older properties.

While the overall market appears frozen, Varna and Burgas continue to thrive, with Varna reporting a 4 percent sales increase and Burgas achieving a remarkable 43 percent rise in real estate transactions in the second quarter. However, Varna saw a minor decline of 0.6 percent in the third quarter, whereas Burgas maintained positive momentum with a 19.11 percent increase.

Post-COVID-19, there has been a notable rise in interest for vacation properties, primarily driven by Bulgarian buyers as many foreign investors have exited the market. Bochev pointed out that while some vacation property prices have increased around Nessebar, others have stagnated due to poor maintenance and unresolved payment issues from past Russian buyers.

The typical buyer in Bulgaria remains financially secure, with an average age of 35 to 40, capable of obtaining long-term loans. Although the profile of buyers has not dramatically shifted, recent regulatory changes may push lower-income individuals out of the market. However, this demographic may still find opportunities in more affordable, smaller properties in less expensive neighborhoods.

October 24, 2024
One in Three Bulgarians Live in Overcrowded Homes

Approximately one-third of residents from third countries in the European Union (EU) are living in overcrowded conditions, a situation mirrored by a significant number of Bulgarians in their own country, according to Eurostat data. In 2023, 34.2% of third-country nationals in the EU were classified as living in overcrowded homes, where the number of rooms was inadequate for the household size. This figure represents an increase from 32.9% in 2022.

In contrast, only 13.7% of EU citizens lived in overcrowded homes last year, a slight decrease from 13.9% in 2022, and down from 15.9% a decade ago. Conversely, the percentage of foreigners in overcrowded housing has risen from 32.6% to 34.2%. The European Statistical Office also indicated that 20.8% of EU residents living in other EU countries are in overcrowded households, a minor increase from 20.5% in the previous year.

Data specific to Bulgaria is limited, with no reliable information available on the living conditions of EU nationals residing in the country. However, it is noted that 30.4% of Bulgarians live in overcrowded homes. Despite this, 83% of individuals over 18 in Bulgaria own their residence, ranking the country seventh in the EU for homeownership, where the average stands at nearly 70%.

The highest rates of overcrowded living conditions are found in Poland (53.3%), Italy (50.7%), Sweden (48.3%), and Greece (47.5%), while the lowest are in Cyprus (4%), Ireland (9.1%), and Malta (10.8%). Among EU citizens living in other member states, overcrowding is most prevalent in Italy (39.9%), Greece (33.1%), and Germany (24.9%), whereas Malta (0.3%), the Netherlands (4.8%), and Cyprus (5.4%) report the lowest percentages.

Additionally, 21% of third-country nationals in the EU experienced a significant financial burden related to housing costs in the past year, spending over 40% of their income on accommodation. This compares to 16.2% of Europeans living in other EU countries and just 8.3% of native residents facing similar financial strain.

October 24, 2024
Housing Loans in Bulgaria Surge by 25.9%, Reaching BGN 23.6 Billion

Housing loans in Bulgaria have continued to grow rapidly. Over the past 12 months, the total amount of bank loans for housing has increased by BGN 4.85 billion, reaching BGN 23.617 billion by the end of September, according to data from the Bulgarian National Bank (BNB).

This represents an annual growth rate of 25.9%. In comparison, at the end of September 2023, the total for housing loans stood at BGN 18.763 billion. The growth rate has accelerated in September, as the annual increase in August was 25.5%, reports BTA.

Consumer loans have also grown by 15% on an annual basis in September, totaling BGN 18.968 billion. Lending in this segment is also accelerating, following a 14.7% annual increase in the previous month.

Bank loans to non-financial businesses reached BGN 44.387 billion by the end of September, growing 8.2% year-on-year. However, this growth rate has slowed compared to the 9.5% annual increase in August.

Other types of loans have risen by 13.2% year-on-year, reaching BGN 448.8 million, while loans for "Employers and Self-Employed" grew by 14.7% to BGN 512.8 million.

Loans granted to financial enterprises amounted to BGN 8.179 billion (4.2% of GDP) at the end of September 2024. Compared to September 2023, these loans increased by 12%.

By the end of September 2024, the total amount of loans for the non-government sector reached BGN 99.375 billion, representing an annual growth of 13.6%. These loans accounted for 50.7% of Bulgaria's GDP.

The change in the size of loans to the non-government sector has also been influenced by net sales of loans from Other Monetary Financial Institutions (MFIs), totaling BGN 143 million over the past year. Over the same period, there were no repurchased loans, according to the BNB.

October 23, 2024
Registered Construction Companies in Bulgaria Surge to Nearly 7,500, Led by Small Firms

The registered construction companies in Bulgaria have reached nearly 7,500 for the first time. The largest share consists of small firms with up to 49 employees, totaling 6,527.

For the first time, the number of registered construction companies in the Central Professional Register maintained by the Bulgarian Chamber of Commerce (BCC) is approaching 7,500. As of September 9, 2024, there are 7,462 firms listed, of which 7,417 are Bulgarian and 45 are foreign. This data comes from the latest economic report on the sector released by the BCC.

"This is a clear sign that after several difficult years, the industry is mobilizing for the expected large volume of work," says the chairman of the BCC’s Management Board, Eng. Ilian Terziev. "The increase in the companies registered with us began in the summer and continues into the fall. This year, 785 new firms have been registered with the BCC, 80% of which are newly established in the Commercial Register," he adds.

"After a long stagnation, we now expect work on municipal programs, renovation projects, and other sites, primarily involving small and medium-sized firms, which are the backbone of the sector," Eng. Terziev states further.

All companies engaged in construction over 100 square meters are required to register with the BCC. Without a certificate from the BCC, they cannot legally operate. As has always been the case, the largest share belongs to small firms with up to 49 employees, totaling 6,527. The report also states that there are 830 medium-sized construction firms with between 50 and 249 employees, while the remaining 60 firms are large, employing over 250 people.

According to the economic report, the total construction output in the first half of this year amounted to 10.2 billion BGN, representing a growth of 28.7% compared to the same period last year. During the first six months of this year, 6,068 building permits were issued for new structures, reflecting a 2.5% decrease compared to the same period in 2023. Construction of 4,326 new buildings began, marking a growth of 9.4%. A total of 2,065 newly built residential buildings were put into operation, indicating a decline of 21.6% compared to the same period in 2023.

In the first half of the year, 2,730 public procurement contracts were announced, totaling 5.7 billion BGN, which is an 18.2% increase in the number of contracts but a 25.4% decrease in their total value.

October 23, 2024
Sofia's Rental Market: Preferences for Furnished Homes in Prime Locations

Tenants in Bulgaria are increasingly seeking furnished apartments in newly constructed residential buildings, according to real estate brokers. These modern developments offer several advantages, such as attractive designs, efficient room layouts, and improved energy efficiency.

A key factor driving tenant preferences is the availability of furniture. Many renters approach their housing situation with the understanding that it is temporary, making them reluctant to invest in purchasing furniture and appliances. Consequently, they prefer to move into properties that come equipped with existing furnishings. The condition of these furnishings significantly influences rental prices; apartments with contemporary furniture command much higher rents compared to those with older, outdated furnishings.

While tenants are often flexible regarding various aspects of a rental property, the location remains a crucial factor in their decision-making. Easy access to public transport, nearby shopping facilities, and amenities play an essential role. For those with private vehicles, the availability of parking spaces or garages is particularly important.

In Sofia, demand for rental apartments is notably high in the central, eastern, and southern districts, especially near local universities. Rising property prices are prompting many individuals to postpone home purchases until they can secure a larger down payment or obtain stable, higher-paying jobs. This trend is contributing to an increased demand for rental housing.

Typically, tenants are not in search of large apartments; instead, they prefer to minimize their expenses to save for their own homes. As a result, they are willing to compromise on the size of the property. However, there is also a market for lavishly furnished large apartments, primarily among foreign company managers residing in Bulgaria temporarily. These individuals often prefer luxurious accommodations and are willing to pay a premium for such properties without the intent to buy.

October 17, 2024
Sofia's Slatina District to Welcome New 75-Meter High-Rise Development

Two new buildings, each 75 meters tall, are set to be constructed in Sofia's "Slatina" district, following an amendment to the construction plan approved by Acting Chief Architect of the Metropolitan Municipality, Bohdana Panayotova, OFFNews reports. This development is taking place on the site of the former "Elektronika" factory, as reported by blogger Boyan Yurukov on Facebook.

The proposed project includes two 17-story buildings with an additional ground floor and lower structures. The transport study for this project was submitted in 2023. The amendment to the plan was initiated by "Belgravia Investments" Ltd., the property's owner, designating the land for an administrative service and production complex.

Yurukov noted that the 75-meter towers will be located directly behind the "Slatina" district building. The amendment process has been expedited, bypassing the typical public announcement due to a lack of interested parties.

October 13, 2024
Bulgaria Sees Significant Property Price Growth, Ranking Second Globally in 2024

Property prices in Bulgaria continue to experience significant growth, with data from the National Statistical Institute revealing a 15.1% increase over the past 12 months leading up to June 2024. In the second quarter of the year alone, prices rose by 3.4%.

This impressive rise positions Bulgaria among nine EU countries that have seen property prices increase by over 100% in the last 14 years, according to Eurostat.

In Knight Frank's Global House Price Index, Bulgaria ranks third for the past 12 months, surpassed only by Turkey and Poland, where property prices increased by 46.4% and 18%, respectively. Bulgaria's growth of 15.1% makes it one of six countries out of 56 analyzed that reported an increase of over 10%. Following Bulgaria are Taiwan (+11.9%), North Macedonia (+11.5%), and Colombia (+10.9%).

Additionally, three other European countries— the Netherlands, Greece, and Croatia—along with Mexico, are among the top 10, each seeing price growth exceeding 9%.

However, the global property market is not uniform, as 13 of the analyzed countries have reported declines in property prices. Hong Kong and Luxembourg experienced the most significant drops, at 12.7% and 10.9%, respectively. Other notable decreases occurred in Jersey, Finland, China, and several major European economies, including France, Germany, and Austria.

In a quarterly comparison, Lithuania's property prices fell by 5.3%. Conversely, price increases persisted in North Macedonia (+8.2%), Turkey (+6.5%), and Hungary (+5.2%), with Norway, Australia, and Poland also experiencing rises exceeding 4%.

By the end of 2024, Bulgaria is expected to rank second globally in property price appreciation, trailing only Turkey. Bulgaria's projected growth stands at 10.8%, while Turkey is anticipated to lead with 14.4%. Poland and Norway are expected to see growth rates of 9.3% and 8.3%, respectively. The most significant declines in property prices compared to the end of 2023 are anticipated in Finland, China, and Ukraine.

October 5, 2024
Unexpected City Takes Lead in Housing Price Increases in Bulgaria

The steady rise in housing prices in Bulgaria is no longer surprising, but what is noteworthy is a shift in the cities experiencing the fastest increases. Traditionally led by cities like Sofia, Varna, Burgas, or Plovdiv, Ruse has now unexpectedly jumped to the forefront in terms of price growth. This was revealed by the latest data from the National Statistical Institute, reflecting the housing market in the second quarter of 2024.

Over the past year, residential properties across the country have seen an average price increase of 15%, with a 3.4% rise in the second quarter alone. However, these averages mask significant regional variations. While prices in Sofia and Burgas each increased by 2.9% in just three months, Plovdiv saw a more substantial rise of 5.3%. Ruse, however, registered a sharp increase of 13.2%. Stara Zagora showed a slight decrease of 0.2% in housing prices during the same period, adding to the unexpected trends.

The statistics provide insight into the changes but do not offer explanations for these shifts. Unfortunately, the National Statistical Institute no longer provides updated data on average housing prices by region, limiting further analysis. Nevertheless, the available data on percentage changes offer a useful indication of market trends, which continue to show an upward trajectory for the most part.

October 3, 2024
Bulgaria's Real Estate Market: 199 Salaries Needed for a 100 sq.m. Apartment

In Bulgaria, purchasing a 100 sq.m. apartment requires the equivalent of 199 monthly salaries, according to a recent study that compares real estate prices across 62 countries against average local wages. The report by BestBrokers.com identifies Denmark as the most affordable country in Europe for homebuyers relative to average income, where the average cost of a 100 sq.m. property is equivalent to 114 net salaries.

Despite being the most affordable for home purchases, Denmark is also noted as the most expensive country in the EU for 2023, with prices for goods and services 43% higher than the EU average, as reported by Eurostat. The country ranks seventh in Europe for average annual income. "Given the significant variations in prices and incomes across countries, the BestBrokers team sought to analyze the real estate market based on the number of monthly salaries needed to buy a home in different European nations," the report explained.

Ireland and Sweden follow Denmark in affordability, requiring 123 and 129 net salaries, respectively, to acquire a 100 sq.m. home, which equates to about 10 annual salaries. However, these figures are theoretical and do not account for other essential expenses, such as food, housing, and childcare.

At the lower end of the ranking are the Czech Republic and Slovakia, with the latter needing 297 times the average salary to purchase an average 100 sq.m. home, equating to nearly 25 years of income. If an individual saved half of their net salary, they would still take around 50 years to save enough for a family home.

Bulgaria sits in the middle of the rankings, requiring 199 net salaries or nearly 17 years to buy a property. In neighboring North Macedonia, the figure is 215 net wages; in Greece, it’s 228; and in Bosnia and Herzegovina, it stands at 255.

The study also examined real mortgage interest rates across Europe for the third quarter of 2024, using data on mortgage loans and projected inflation rates to determine the "real" costs for borrowers. The report indicates that Russia currently has the highest real mortgage interest rate, projected at 12.3% for the period from July to September 2024, following the end of its state-backed mortgage program.

Following Russia, Latvia and Poland also report high real mortgage rates at 6.65% and 5.1%, respectively. In contrast, Germany’s rate is at 1.85%, while the United Kingdom has an even lower rate of 1.77%. Other major European economies, such as France (1.13%), Italy (0.99%), and the Netherlands (0.96%), report rates around 1%.

Interestingly, negative real mortgage rates are found in Belgium (-0.52%) and Sweden (-1.21%), indicating that homebuyers in these countries might not pay interest on their mortgages; this suggests that real borrowing costs may be declining, according to the study.

Globally, South Africa is identified as the most affordable country relative to salaries, where residents need only 71 times the average salary to own a 100 sq.m. property. The United States ranks second, with homebuyers requiring 76 average monthly salaries, which is approximately six annual salaries. At the opposite end of the spectrum, Nepal demands 684 salaries for homeownership, followed closely by Turkey at 631 salaries, equivalent to 52.5 years of earnings.

October 1, 2024
New Bulgarian Loan Restrictions Take Effect, Impacting Homebuyers

Starting today, new restrictions imposed by the Bulgarian National Bank (BNB) on housing loans will take effect. Under these regulations, commercial banks are prohibited from lending more than 85% of the property's market value.

Additionally, the maximum repayment period for mortgage loans is capped at 30 years, and borrowers' monthly installments cannot exceed 50% of their monthly income. According to real estate agency data, approximately 50% of home buyers in Sofia rely on mortgage loans, but brokers predict that around 10% of individuals who previously qualified for loans may now find themselves unable to do so.

There is provision for the approval or renegotiation of loans that deviate from the newly established requirements; however, the total amount of such loans approved or renegotiated in the current quarter cannot exceed 5% of the total gross value of newly granted or renegotiated loans from the previous quarter. To monitor these allowable deviations, the BNB will implement additional reporting measures.

BNB Governor Dimitar Radev noted that these exceptions may apply in cases where other types of collateral are used alongside residential real estate.

September 30, 2024
Bulgaria Tops European Housing Rankings with 668 Dwellings Per 1,000 People

According to the latest Global Property Index from international consulting firm Deloitte, Bulgaria boasts the highest number of dwellings per 1,000 people in Europe, with 668 homes for every 1,000 citizens.

Spain follows in second place with 559 dwellings per 1,000 people, while France ranks third with 553. Countries like Germany, Belgium, and Norway, which are often considered more economically developed, fall significantly behind. At the lower end of the spectrum are Greece, Israel, and Great Britain.

Experts note that this high ratio of dwellings creates significant profit potential in the Bulgarian real estate market. Bulgaria stands out among 24 European countries in terms of housing availability.

In the past six months, housing prices in Sofia have risen by 12%, indicating a consistent and stable increase in property values in the capital and other major cities, according to market analysts cited by BNR.

The stability and predictability of the market appeal not only to individual buyers but also to large investors, drawn by a range of luxury developments, holiday homes, and commercial properties.

Experts emphasize that the abundant supply of diverse property types fosters investment opportunities and mitigates risks associated with capital concentration in specific markets or segments. Additionally, they suggest that Bulgaria is becoming a favored destination for investments, aided by low construction restrictions that allow for innovative projects featuring modern, energy-efficient solutions.

September 23, 2024
Price Gap Widens Between New Builds and Panel Homes in Sofia

The price gap between newly constructed homes and panel buildings in Sofia has reached approximately 400 euros per square meter, with expectations that this difference will continue to widen, according to construction contractors. The demand for larger, more comfortable properties is outpacing supply, leading to rising prices.

Buyers tend to choose apartments based on their financial capabilities. Families often purchase larger units, such as five-room apartments, even if they have just one child, realtors noted. However, the majority of transactions involve two- and three-room apartments, with a particular demand for three-room units averaging around 90 square meters, which can accommodate a family comfortably.

The desire for home ownership in a pleasant environment is driving interest in new construction projects. There is a notable preference for closed residential complexes, where developers create inviting surroundings, including lawns and play areas for children, enhancing the overall living experience. As people seek to settle in their own homes, the trend toward new developments continues to grow.

September 22, 2024
Housing Loan Contracts via Credit Intermediaries Reach 8,533 in Bulgaria

In the first half of 2024, a total of 8,533 consumers secured housing or mortgage loans through credit intermediaries. Among these, 8,413 contracts were signed with banks, while 120 were arranged with financial institutions registered under Article 3a of the Law on Credit Institutions, as reported by the Bulgarian National Bank (BNB).

The total value of credit agreements made between banks and customers through these intermediaries exceeded 1.725 billion leva. Additionally, loans facilitated by financial institutions amounted to more than 3.245 million leva. As of mid-2024, there are 116 registered credit intermediaries operating under the Consumer Real Estate Loans Act, according to BNB data.

August 31, 2024
Interest Rates on Existing Bulgarian Mortgages Begin to Rise

Interest rates on existing mortgage loans in Bulgaria are beginning to rise, according to a check by BNR based on recent data. Although these instances are currently isolated and do not yet impact overall statistics, they signal a trend that experts have anticipated for some time. The increase in interest rates is more pronounced for loans denominated in euros.

For several months, financial observers have noted a rise in the average interest rates on leva deposits. This trend often leads to higher loan interest rates, particularly affecting banks with smaller market shares and euro-denominated mortgages. The adjustments in deposit rates can serve as an indicator of impending increases in loan costs.

Desislava Nikolova from the financial portal "Moite Pari" provided specific examples, noting that interest rates on some loans have risen by between 1 and 1.5 percentage points. For instance, if the interest rate rises from 2.6% to 3.6%, the monthly repayment for a loan of 100,000 leva or euros would increase by about 50 leva.

While interest rates on leva mortgage loans for existing agreements are rising, current bank offers remain unchanged. It is important for consumers to monitor movements in deposit interest rates, as these may signal potential adjustments in loan rates. Banks may decide to align their loan rates with the trends in deposit rates, making a gradual increase in loan rates a likely outcome as the average deposit interest rates continue to climb.

August 19, 2024
Bulgaria Tops Europe for Lowest Mortgage Rates

Bulgaria has emerged as a standout in Europe for having the lowest mortgage rates, according to a recent study by Deloitte. In 2023, Bulgarian mortgage rates were remarkably low, averaging just 2.58 percent. This rate is significantly lower than those in other European countries, with Poles paying an average of 8.08%, Romanians 7.70%, and Hungarians 7.40%. In Serbia and the Czech Republic, rates were also high, at 6.76% and 5.90% respectively.

Other countries that enjoyed relatively low mortgage rates last year include Belgium with an average of 3.33%, Croatia at 3.26%, and Spain at 3.45%. The study's authors observed that Europe's mortgage landscape is quite varied but did not provide specific reasons for Bulgaria's notably low rates. They attributed differences in national credit markets to a mix of factors such as housing affordability, household debt levels, and financial literacy.

The low mortgage rates in Bulgaria have been widely discussed and analyzed. A significant factor contributing to these low rates is the growing income levels in certain sectors. Many Bulgarians prefer to keep their savings in banks rather than investing in stocks, shares, or mutual funds. This excess of deposited money encourages banks to offer cheaper loans. Additionally, with low interest rates and a strong preference for real estate investments, Bulgarians are taking out more loans to purchase properties, driving up housing prices despite warnings of a potential price bubble.

The trend of rising property prices continues into 2024, in line with increasing bank savings and persistent low mortgage rates. In contrast, other European countries are experiencing different real estate market dynamics. Germany is dealing with a crisis and declining property prices, while countries like Portugal, Romania, Denmark, and Austria are facing significant increases in mortgage interest rates.

August 18, 2024
Strong Foreign Investment Fuels Bulgarian Real Estate Market in 2024

In the first half of this year, approximately 92.6 million euros were invested in business properties in Bulgaria, according to data from the consulting firm Colliers International. Notably, over 77% of this amount came from a single transaction involving a portfolio of industrial and logistics properties, as well as construction plots.

The majority of the deals, over 81%, involved income-generating assets, with the remaining transactions being speculative real estate deals. A significant portion of the investments, 74%, was directed towards industrial and logistics areas, followed by hotels at 15%, offices at 8%, and construction land at 3%.

The returns on prime real estate remained stable from the previous year, with office and commercial spaces yielding 7.75%, and industrial and logistics properties at 7.50%. Local investors have been increasingly active in the Bulgarian market in recent years, although this trend paused in the first half of this year, with international capital accounting for 77% of the total investment volume.

The broader region of Central and Eastern Europe (CEE) has seen a reduction in investment volumes, reflecting a trend that began in Western Europe due to rising interest rates. In Bulgaria, the investment volumes were nearly 25% lower compared to the previous year, whereas in CEE, the decline exceeded 50%. Despite this, Colliers anticipates that 2024 will see an increase in investments, though still below the levels seen before the interest rate hikes.

In more attractive markets like Poland, the Czech Republic, and Hungary, a trend of price convergence is expected as the European Central Bank (ECB) reduces key interest rates, leading to a quicker recovery in investment volumes. However, Bulgaria has yet to see any price adjustments. The country has maintained good levels of market activity, largely due to its low economic indebtedness and conservative investment approach.

The adoption of the euro as Bulgaria’s official currency has been delayed, primarily due to unmet inflation criteria, with the lack of a stable government potentially causing further delays. However, Colliers predicts that this process could begin in 2025, which might increase international investor interest in Bulgaria.

Commercial banks remain very active in the credit market, with the rise in European interest rates having minimal impact locally. Starting in 2024, European banks will need to report the ratio of financed "green" projects. ESG considerations are expected to play a growing role in credit decisions and will likely become a focus for market participants, including entrepreneurs, investors, and tenants. The cost of updating older buildings will be significant but less than the alternative of leaving them outdated.

By mid-2024, the number of houses in residential complexes in Bulgaria is expected to reach 1,700, spread across 112 projects. The average square footage of these homes has decreased from about 435 square meters in 2020 to 375 square meters, a trend driven by the shift of parking spaces outside built-up areas and the rise of the "vertical apartment" concept, which features more compact rooms and smaller courtyards.

Currently, over 1,200 houses are under construction across more than 90 projects, with a third of these concentrated in the five largest developments. Popular locations for these investments include the southern arc of the ring road, Bistrica, Pancharevo, and Lozen.

August 18, 2024
Bulgaria's Housing Loans to Stay Low in the Coming Months

Housing loans in Bulgaria are expected to remain inexpensive in the coming months, according to a recent survey conducted by the Ministry of Finance. Financial intermediaries, including commercial banks, investment firms, management companies, and pension funds, anticipate that interest rates on loans will stay at their current low levels.

The primary reasons for this stability include an ample supply of money within banks, significant competition among them, and persistently low deposit rates. In the second quarter of the year, new housing loans continued to be offered at historically low rates, with a slight decrease in interest rates compared to the first quarter. However, there was a modest increase in interest rates for new corporate loans denominated in leva and euros, while rates for US dollar loans saw a slight decline. Consumer loans in leva experienced a more noticeable rise in interest rates.

Deposit interest rates are also expected to remain steady, with the majority of financial intermediaries predicting no significant changes. The slow transmission of Eurozone interest rates to domestic loan and deposit rates, due to local market conditions, is a contributing factor. The ample liquidity in banks and ongoing competition, coupled with a steady increase in deposits, are key elements maintaining the low deposit rates.

Inflation is projected to rise slightly in the near future, with survey responses reflecting mixed expectations. While 25% of respondents foresee inflation remaining stable, 44% anticipate a slight increase, and 31% expect a slight decrease. Previous forecasts of a modest rise in inflation for the second quarter materialized, with inflation dropping to 2.5% by April 2024, its lowest in three years. However, inflation increased slightly to 2.7% in May and 2.8% in June, primarily due to higher energy prices.

In terms of employment, financial intermediaries do not foresee significant changes. A majority of 56% expect employment levels to remain stable, while 31% predict growth. According to recent NSI business surveys, hiring expectations are improving in the construction, industry, and services sectors, though expectations for employment in retail trade are slightly declining.

August 17, 2024
Rising Costs: Bulgarian Agricultural Land Prices Increase by 27.9%

The price of agricultural land in Bulgaria continues to rise. Currently, the cost of leasing agricultural land in the country averages 313 euros per square meter annually. This marks a notable increase from 2021, when the price was 260 euros per square meter per year, reflecting a 17% increase.

Recent data from the Capital Statistics Bureau reveals that in 2023, the average rental price per square meter in the Dobrich region has reached 105 leva, which is a 16% decrease compared to 2022. However, compared to the original price of 62 leva per square meter, this new rate represents a 69.3% increase. Last year, the average price for agricultural fields in the Dobrich region was 3,623 leva per decare, marking a 27.9% rise from the previous year.

The highest land prices in 2023 were recorded in the municipality of Dobrich-Central, reaching 4,404 лежа per square meter, which is 30.8% higher than the previous year. Similarly, in General Toshevo municipality, prices increased by 19.3% from the previous year. The initial price for land in Dobrich in 2023 is 1,607 leva per decare, representing a 125.4% increase from the previous rate. This year's data also show a 27.8% rise in the initial price of agricultural land compared to the previous year, maintaining the highest price levels in the country.

In the municipality of Tepel, the rent for land is 93 leva per decare. Analysts from Moitri report that agricultural and long-term assets generally retain their value well, especially in times of high inflation. Historically, land has proven to be a strong asset for preserving capital, often outperforming real estate.

Globally, the value of agricultural land has increased by 10.2% by 2022, compared to an inflation rate of 8%. This trend suggests that agricultural land remains a solid investment despite economic fluctuations. According to Eurostat, rental rates for agricultural land are lowest in South-Western and South-Central Bulgaria, while North-Eastern Bulgaria sees higher rental costs. Agricultural land in Turkey remains the least expensive within the European Union.

August 14, 2024
Bulgaria’s Housing Market: Two-Room Homes Prevail, Sofia Trails in New Construction

In Bulgaria, newly constructed homes are predominantly two-room units, averaging 85 square meters in size and built mainly from reinforced concrete. According to Nova TV, the highest construction activity is currently seen in Plovdiv and Burgas.

Last year, nearly 5,500 new homes were built in Bulgaria, marking a slight increase from the previous year and surpassing the fewer than 4,000 homes built in 2021. It's worth noting that the pandemic period significantly impacted the construction sector. Traditionally, the last quarter of the year sees the highest number of new home registrations.

Despite a general upward trend in new home construction, preliminary data from the National Statistics suggest a slight decline this year. The number of newly built residential buildings in the first half of this year is down by 22% compared to the same period last year. This year’s construction includes over 1,500 houses, nearly 300 residential blocks and cooperatives, and around 100 villas, with a small number of mixed-type buildings and one newly built dormitory.

Focusing on the last quarter from April to June, there were just over 1,000 new residential buildings and more than 5,000 new dwellings. Reinforced concrete buildings are the most common, making up nearly 80% of new constructions, while brick buildings account for about 20%. Prefabricated apartment buildings continue to be built but represent less than 1% of new homes.

The majority of new homes are two-room units, constituting nearly 40% of the total. Three-room homes follow, making up about one-third. The average size of a newly built home is 85 square meters. The largest homes are found in the Lovech and Ruse regions, where the average size is twice the national average, while Vidin has the smallest average size at 63 square meters. Sofia ranks second to last with an average of 71 square meters.

Plovdiv, Burgas, Varna, and Sofia-region have surpassed Sofia-city in terms of construction activity. Burgas and Varna have seen around 130 new residential buildings each over the past three months, while Plovdiv leads with over 160. Sofia is fifth, followed closely by Blagoevgrad. Although Plovdiv has the highest number of new buildings, they are generally smaller cooperatives and houses, with just over 600 new dwellings. In contrast, Burgas has seen over 1,000 new dwellings, indicating larger buildings. Sofia follows Burgas in the number of new dwellings. Vidin saw only one new house built in the last three months. At the last national census, over 1.6 million unoccupied dwellings were recorded in Bulgaria, representing 39% of the country's homes in 2021.

August 11, 2024
Rising Demand for Gated Community Vacation Homes in Bulgaria

Interest in vacation properties within gated communities in Bulgaria is on the rise. The cost of seaside holiday properties varies significantly based on proximity to the shore and the size of the unit. Studios average around 1000 euros per square meter, while two-room apartments range from 1050 to 1100 euros per square meter, and three-room apartments are about 1200 euros per square meter, according to a real estate market analysis.

In the Northern Black Sea region, popular areas include Golden Sands, Saints Constantine and Helena, Chaika, and the towns of Balchik and Kavarna. Property prices in Kavarna and Balchik are approximately 900 euros per square meter, whereas in Saints Constantine and Helena, prices can reach up to 1500 euros per square meter, depending on the property's features.

The Central Black Sea resorts of Nessebar, Sveti Vlas, and Sunny Beach are also sought after, with average prices ranging from 1000 to 1050 euros per square meter. In the Southern Black Sea region, Sozopol sees high demand, with prices reaching 1300 euros per square meter. Studios here are most prevalent, priced between 50,000 and 60,000 euros, while two-room apartments average around 70,000 euros. Other notable areas include Lozenets and Tsarevo, with prices in Tsarevo around 1100 euros per square meter and in Lozenets between 1200 and 1500 euros per square meter.

Interest extends to mountain properties as well. In Bansko, average prices are around 800 to 900 euros per square meter, with studios priced at 30,000 to 40,000 euros and two-room apartments around 50,000 to 60,000 euros. Borovets and Pamporovo offer fewer choices, with Borovets averaging 1100 euros per square meter and Pamporovo 750 to 800 euros per square meter. Two-room apartments are most common in these areas.

There is a growing preference for properties that offer added value, such as gated complexes and homes on the outskirts. While detached boutique buildings once saw high demand, they no longer command top market prices. However, some buyers are willing to pay up to 800,000 euros for the security of a gated community.

Investors offering flexible payment plans, like the 20/80 scheme where 20% is paid upfront and the remaining 80% upon completion, are finding success. This payment structure signals stability and financial backing, making such properties more appealing and ensuring quicker sales even at higher prices.

August 8, 2024
Burgas Emerges as Top Choice for Living in Bulgaria

Burgas is increasingly being recognized as a top city to live in Bulgaria, according to Alexander Bochev, chairman of the Board of Directors of the National Real Estate Association (NREA), who shared insights in an interview with BTA.

Bochev reported that Burgas outpaces Sofia, Varna, and Plovdiv in real estate activity, showing nearly a 40 percent growth in transactions and a rising trend in the purchase of second vacation homes. The most recent figures from the Registration Agency reveal a significant spike in real estate transactions in Burgas. Compared to the first quarter of the year, transactions in Burgas surged by nearly 49 percent (48.8 percent), while Sofia saw a 32 percent increase, Plovdiv 21.5 percent, and Varna 24.7 percent. When comparing the second quarter of this year with the same period last year, Burgas still leads with a 43 percent increase, while Sofia grew by 11.9 percent, Varna by 4.25 percent, and Plovdiv experienced a 2 percent decline.

Overall, the real estate market in Bulgaria has seen a modest annual increase of about 10 percent across the four major cities from the second quarter of 2023 to the same period in 2024. However, the total number of real estate transactions across the country showed minimal growth, with only eight additional entries recorded, amounting to a mere 0.01 percent increase. This highlights a significant trend where the rise in real estate sales is predominantly concentrated in major cities, while smaller towns and non-regional centers have experienced a downturn, contributing to the minimal national growth.

July 28, 2024
Why Bulgarians Prefer Homeownership: Affordable Prices and Stable Interest Rates

Housing in Bulgaria remains more affordable compared to its Western European counterparts, a fact that contributes to the high rate of homeownership in the country. According to real estate brokers, about 92.5% of Bulgarians live in their own homes. This high homeownership rate is supported by a favorable ratio of average wages to property prices in major cities, making it financially viable for many to purchase rather than rent.

The low interest rates on mortgages, which are nearly at par with inflation, also play a significant role in this trend. Many Bulgarians prefer paying mortgage interest for home ownership rather than paying rent. Additionally, Bulgarians tend to stay in their cities and neighborhoods for longer periods compared to residents of other European countries, reducing the need for frequent relocations.

In Bulgaria, the mobility of its residents is relatively low. Many people do not change cities frequently, and the compact nature of cities means there is little need to move to a different neighborhood even with a new job. Consequently, if individuals have a stable job and financial means, they prefer to invest in their own property.

People from smaller towns often relocate to Sofia in search of better employment opportunities, leading to a strong demand for both purchase and rental properties in the capital. Initially, newcomers to Sofia may opt for rental housing while they familiarize themselves with the real estate market and look for a permanent home.

The rental market in Bulgaria is also thriving. This growth is partly due to an increase in foreign tourists and the rise of short-term rental options through various online platforms. In major cities and popular resorts, tourists prefer renting apartments for short stays, as these often offer more space and amenities, such as a kitchen, at a better value compared to hotel rooms.

July 27, 2024
Property Prices Surge in Bulgaria: Why Sellers Are Finding It Harder to Close Deals

According to recent data from the National Statistical Institute (NSI), residential property prices in Bulgaria surged by 16% in the first quarter of 2024 compared to the same period last year, marking the highest growth rate since 2022. This increase is notably higher than the 10% rise observed in 2023. The data also reveals that the average monthly salary in Bulgaria saw a 16.8% increase year-on-year, yet this growth in income was outpaced by the property price escalation.

The highest price hikes were recorded in Varna, with a 23.5% increase, followed by Sofia at 18.2% and Burgas at 12.3%. The surge in prices was especially pronounced for new construction properties. This uptick in property values has spurred more activity in the real estate market, with an increase in transactions. In the capital, the first quarter of 2024 saw the strongest purchasing and selling activity since 2008. Varna and Burgas also reported a rise in transactions by 12.8% and 9.7%, respectively, while Plovdiv saw a nearly 4% increase.

Mortgage lending remains a significant factor driving the housing market, with interest rates in Bulgaria among the lowest in the EU. The limited supply of properties for sale has further inflated market prices, creating a favorable environment for sellers. However, despite the strong market demand, many property owners struggle to sell their homes at their desired prices or within their preferred timelines.

Experts from the Registration Agency offer several tips to avoid common pitfalls when selling property. One key recommendation is to research the market thoroughly. Many property owners are unaware of current market transaction levels and may set unrealistic prices. It is crucial to consider various factors such as the city, region, type of construction, and property specifics. Consulting with a real estate expert can help set a competitive price.

Another important step is to prepare property documentation in advance. Owners often overlook this until negotiations begin, but unresolved document issues can hinder a sale. This is particularly relevant for properties with shared ownership or those inherited from family members, where additional complexities can arise.

Effective property presentation is also essential. In the digital age, a well-presented property is crucial for attracting interest. This includes organizing and tidying up the space, taking high-quality photos from various angles, and potentially offering virtual tours to provide a detailed view of the property. The description in the advertisement should highlight key features and advantages of both the property and its location.

Overall, owners who fail to address these aspects may find it challenging to sell their properties efficiently and at their desired prices.

July 26, 2024
Bulgaria Sees Surge in Demand for New Construction Amid Rising Property Prices

In Bulgaria's real estate market, recent trends highlight a significant shift toward new construction. The latest data indicates that Bulgaria ranks second out of 56 countries surveyed by Knight Frank for price growth. This surge in prices coincides with a high rate of construction in major cities and a slight rise in home loan interest rates.

A noticeable trend in recent years is the increasing preference among buyers for newly built properties. New constructions are favored for their superior quality, better insulation, improved distribution of space, and modern amenities, such as smart home features and additional storage. This trend is driving sales for large real estate agencies, many of which are now developing their own projects to meet client demand.

The older panel buildings, first constructed in the late 1950s and more prominently in the 1960s, are now between 60 to 70 years old, prompting many residents to seek newer alternatives. This shift is evident in neighborhoods like Ovcha Kupel, Mladost, and Lyulin, where panel buildings are prevalent. New developments are also attracting interest in emerging areas such as Malinova Dolina, Vitosha, Krastova Vada, and Manastirski Meadows, although these areas still lack fully developed infrastructure.

The demand for new properties remains strong in well-established neighborhoods, while developing and peripheral areas offer more affordable options. In Sofia, buyers increasingly prefer homes near metro lines and locations with accessible amenities, including kindergartens, schools, and healthcare facilities. Parking issues are often addressed by purchasing additional parking spaces or garages.

July 7, 2024
Bulgaria Leads EU in Housing Price Growth

According to Eurostat, Bulgaria experienced the highest growth in housing prices among EU countries, with a 7.1% increase compared to the last quarter of 2023. This marks the most significant rise in housing prices in Bulgaria since the last quarter of 2007.

In the first quarter of this year, house prices in the Eurozone decreased by 0.4%, while they increased by 1.3% in the EU compared to the same quarter of the previous year. Eurostat also noted that in the fourth quarter of 2023, housing prices had decreased annually by 1.2% in the euro area and had risen by 0.2% in the EU.

When comparing the first quarter of 2024 to the fourth quarter of 2023, house prices fell by 0.1% in the Eurozone and increased by 0.4% in the EU.

The surge in Bulgarian housing prices can be attributed to several factors. Economic stability and growth have boosted consumer confidence, leading to increased demand for property.

Additionally, low interest rates and favorable mortgage conditions have made home buying more accessible to a broader segment of the population. Foreign investment has also played a significant role, with investors seeking profitable opportunities in Bulgaria's real estate market.

Urbanization trends and infrastructure development in major cities like Sofia and Plovdiv have further heightened demand. Moreover, limited housing supply relative to growing demand has exerted upward pressure on prices, culminating in the significant 7.1% increase reported by Eurostat.

July 5, 2024
No More "Little Russia" on the Black Sea Coast: Young Bulgarians and Retired Europeans Return to Buy Properties

The holiday property market along Bulgaria's Black Sea coast is experiencing a shift away from its previous dominance by Russian buyers, now attracting a blend of younger Bulgarian professionals and retired Europeans. According to a comprehensive report by BTA, half of the buyers for seaside apartments are Bulgarians under 30, primarily from the IT sector, while the other half consists of retirees from Germany, France, Italy, and the Netherlands.

Demand is particularly strong for two-bedroom apartments within gated complexes, with average prices starting at 1,900 euros per square meter. Maintenance fees, which cover amenities like pools and gyms, no longer deter buyers, who typically spend around BGN 60-70 per month on these services. Ukrainian investors are also entering the market, focusing on new residential developments near the sea.

This snapshot of the summer holiday market in Bulgaria was detailed by Atanas Argirov and Stefka Kalcheva, members of the National Association "Real Estate" Management Board.

In Varna, residential property prices have surged by 60 percent over the past two years, prompting a shift in buyer interest towards vacation homes. Atanas Argirov notes that holiday property prices have also risen, albeit more slowly, by 25 percent during the same period, indicating a stable upward trajectory despite lagging behind residential real estate.

The preferred locations in Varna include areas around the city center like "Sts. Constantine and Helena" and its surrounding districts. These locales, increasingly structured as residential hubs, appeal due to proximity to amenities such as large supermarkets and easy access to Varna and Vinitsa districts. The trend shows an almost equal number of permanent residents and vacation property owners in these areas.

In Golden Sands, demand for vacation properties is also on the rise, particularly within closed aparthotel complexes used mainly as second homes rented out during the summer season. Despite limited year-round inhabitation, interest remains high, with several new residential projects underway in "Sts. Constantine and Helena" and ongoing development in the Golden Sands area.

Buyers in Varna predominantly favor two-bedroom apartments, which account for about 40 percent of all real estate transactions in the city. Larger units with more than three rooms are preferred by IT professionals, who utilize them not just as residences but also as workspaces, reflecting a growing trend towards multifunctional living spaces. Security and amenities in gated communities attract over 80 percent of buyers, with rising maintenance fees posing minimal deterrent.

Approximately 60 percent of new buyers in Varna and its surrounding resorts are aged between 25 and 35, many of whom work in the IT sector. Bulgarians make up the majority of purchasers, while retirees from Western Europe constitute a smaller yet significant demographic, alongside buyers from Ukraine and Israel. The departure of Russian buyers has led to a smaller foreign presence in Bulgaria's real estate market, with Ukrainian investors beginning to play a more prominent role, particularly in high-end developments near Alen Mak and Manastirski Rid.

In the Burgas region, interest in vacation properties is steadily growing, with Bulgarian citizens accounting for 50 percent of transactions. The remainder includes retirees from Germany and a diverse mix of buyers from Poland, the Czech Republic, Israel, and Russian-speaking countries. This influx has partially offset the decline in Russian buyers, who face logistical challenges in utilizing their Bulgarian properties due to visa and transport restrictions.

Property prices in Burgas have seen a modest increase of approximately 5 to 6 percent since the beginning of the year, aligning with inflation rates. Despite a balanced market without significant peaks, industry experts predict a slight rise of 2-3 percent in housing prices by year-end, totaling an increase of 4-8 percent for 2024.

Sozopol, Nessebar, Sunny Beach, and Primorsko remain favored destinations for vacation property investments, with a growing interest from Ukrainian buyers in Pomorie. The profile of buyers in Burgas skews towards younger Bulgarians aged 35-45 seeking second homes, while foreign buyers, particularly from Poland, are also prevalent. Financing through mortgage loans is common, with expatriate Bulgarians and EU residents contributing to a significant portion of purchases.

In both Varna and Burgas, two-bedroom apartments are the preferred property type among buyers, offering flexibility for seasonal use. The appeal of closed complexes lies in their security and maintained amenities, with additional fees, including maintenance costs, posing minimal concern for new buyers. Prices are influenced by proximity to the sea, with properties closer to the beach commanding higher values. However, affordability remains a consideration, with lower-priced options reflecting their distance from coastal areas and historical town centers.

July 2, 2024
Bulgaria's Real Estate Boom: Varna Outpaces Sofia in Price Growth

In Bulgaria, residential property prices are on the rise, with Varna leading the charge ahead of even Sofia, according to recent statistics reported by Nova TV.

During the first quarter of this year, Varna saw a significant increase of 9% in housing prices, slightly outpacing the growth in the capital city. Despite these hikes, there appears to be unabated interest from prospective buyers, indicating a robust market demand.

Iliana Grudeva, currently in search of a spacious apartment in Varna, emphasized her need for a larger living space. "I want a multi-room apartment, preferably with three rooms, as my three children are at an age where separate rooms are necessary," she explained. Grudeva expressed urgency in her decision to buy, citing escalating prices and the uncertain impact of potential Eurozone integration on property values.

Despite Varna now boasting the highest property prices nationwide, the 9% surge has not deterred prospective buyers. "The price increase does not discourage buyers. If anything, it motivates them to act swiftly," noted Ivaylo Gradev of the National Association of Real Estate. "After years of speculation about falling prices and rising interest rates, people are observing the market closely and opting to make purchases sooner rather than later," he added.

June 5, 2024
Wealth Abroad: 3,600 Bulgarians Declare Overseas Holdings

Publicly available information from the National Revenue Agency reveals that 3,604 Bulgarian residents have properties abroad, all of which have been duly declared to the agency.

Bulgarians own properties across various countries in the Balkans and the European Union. Additionally, some citizens take pride in owning properties in less commonly chosen destinations, including Andorra, Argentina, Armenia, and others.

Following the deadline for tax return submissions, data from the National Revenue Agency highlights that 927 Bulgarians reported an income exceeding BGN 1 million (EUR 511,371) last year. Notably, among the affluent individuals, one person stands out with a reported personal income surpassing 70 million BGN (EUR 35,796,032).

The primary source of wealth for the wealthiest Bulgarian individual stems largely from the sale or exchange of shares and other financial assets.

During the recent tax campaign, which concluded on April 30, over 742,000 individuals and identical traders submitted tax declarations. Among them, 20,247 people earned more than BGN 100,000 (EUR 51,137), with 1,228 individuals earning over half a million BGN (EUR 255,685).

Additionally, 514 Bulgarians reported an income ranging between 750,000 (EUR 383,528) and 1,000,000 BGN (EUR 511,371), while 4,710 individuals earned between 250,000 (127,842) and 500,000 BGN (EUR 255,685)) for the year.

June 4, 2024
Bulgarian Farmland Prices Go Crazy - Why You Shouldn't Buy Now

The agricultural land market in Bulgaria is on the verge of overheating, according to the latest data from the National Statistical Institute. Over the past decade, field prices in certain areas have skyrocketed more than sixfold, reaching levels where natural resources must be extracted to recoup the investment. Real estate experts warn that a bubble is inflating, and it will soon burst, drawing parallels to 2013 when land prices plummeted by nearly 50% within a single month.

Transactions have stalled recently due to high prices and problems in the agricultural sector, as indicated by data from the Chamber of Notaries. Sellers are demanding unrealistic values for their land, while farmers are reluctant to buy, squeezed by low prices for agricultural produce and the skyrocketing cost of fertilizers and fuels that make production more expensive.

The market is dominated by speculators seeking quick profits, artificially driving up prices by buying and reselling plots without considering their real characteristics and potential profitability. This practice fuels the bubble and risks a sharp price drop. However, when discussing land prices, one should not overlook that it is the primary productive resource of Bulgarian agriculture, which is currently experiencing its most challenging period in years.

Bulgarian agriculture has been hit by a triple storm. The low prices of Ukrainian grain have collapsed the country's production and impacted the largest farms. The government aid granted is a mere drop in the ocean compared to the constantly rising prices of fertilizers and fuels, according to farmers. Illegal farm produce imports and labor shortages are further crippling the industry.

Without profits from agriculture, there are logically no candidates willing to purchase land. Brokers advise owners of agricultural land to first research the real prices of their plots. Like any productive asset, the value depends on several factors – land fragmentation, irrigation, and the ability to produce agricultural output.

Farmers should be aware that small plots are difficult to cultivate, and in some areas, they remain uncultivated. Therefore, it is challenging to expect a profit from them, and their prices remain low. A third pitfall for prospective investors is the quality of agricultural land. A good price is only the one that has been processed and subjected to compaction (balding).

There are also pitfalls in rentierism – for example, if there is only one tenant on the land, they become a monopolist. If the average rent is BGN 50 (EUR 25) per hectare, they can offer you 30, and you should be satisfied with this fact because there is no other candidate on the horizon. Lately, it is a common phenomenon for defrauded owners to have tenants who do not pay. Payments due can be sought through the courts.

It's not uncommon for someone to take your land away – through fraud or a simple legal trick. The Title Act gives title to immovable property by statute of limitations with bona fide possession for five years. This means that a fraudster has the opportunity to prove that they were a good landlord and, without notifying the real landlord, become the owner of the land.

If you are still determined to sell or buy agricultural land, approach with caution and study the terrain well. Do not succumb to promises of quick profit and seek professional help from specialized companies. Land is a valuable resource, but its price is not guaranteed. Consider all the risks and make your trades wisely so you don't end up among the disappointed.

June 4, 2024
Bulgaria's Property Market: Bubble or Boom?

Is there a property bubble forming in Bulgaria? Predicting such market phenomena is notoriously tricky, often resembling guesswork more than science, especially in a country like Bulgaria, where market unpredictability reigns even after 35 years of market reforms.

The absence of a mature capital market further complicates the picture, limiting opportunities for secure investments despite ample liquidity. Coupled with factors like low interest rates on deposits and attractive mortgage terms, Bulgarians' longstanding enthusiasm for property investment is only reinforced.

Despite a significant annual increase in property lending, reaching nearly 24% in April according to Bulgarian National Bank data, the central bank has yet to implement substantial measures to cool the market. Governor Dimitar Radev has acknowledged the potential risk but refrained from drastic action.

Warnings of a property bubble have persisted for years, yet investments in real estate continue to surge, buoyed by lender enthusiasm and buyer demand. Historical data shows Bulgaria ranking high in property price appreciation within the EU, yet lagging behind countries like Estonia, Hungary, and Lithuania.

Optimism surrounding Bulgaria's prospective Eurozone membership further fuels property and interest rate expectations. However, questions linger over whether this factor has already been fully priced into the market.

The path to Eurozone accession requires robust institutions, a domain where Bulgaria still faces challenges. The pending introduction of the euro in 2025 or 2026 does not guarantee immediate improvement without adequate governance reforms.

Legal uncertainties, limited investment opportunities, regulatory oversight, and market participants' behavior are likely to dictate Bulgaria's real estate trajectory. The role of market participants' irrational exuberance cannot be overstated, as belief in perpetual price increases often drives market dynamics.

In navigating Bulgaria's real estate landscape, recognizing the interplay of these factors is essential, as markets are shaped not just by economic fundamentals but also by human behavior and institutional dynamics.

May 22, 2024
Foreign Interest Surges in Bulgarian Property Market, Especially in Resorts

Real estate agents have reported a surge in property purchases by foreigners in Bulgaria's resorts and major cities like Sofia, Plovdiv, Varna, and Burgas. While resorts like Bansko and Sunny Beach have seen the most transactions by foreigners, Bulgarians remain the primary buyers across all mountain and seaside destinations.

In urban areas, foreign buyers are primarily interested in high-end apartments priced above 200,000 euros, whereas in resorts, they tend to opt for one- and two-bedroom apartments ranging from 30,000 to 70,000 euros. Some transactions have involved Russian buyers.

Property prices in Bulgarian resorts have hit their highest levels in the past decade or more. Borovets stands out among mountain resorts, with average prices reaching 850 euros per square meter. Meanwhile, Sozopol and other resorts south of Burgas command the highest prices among seaside destinations. Prices in Sunny Beach and Bansko are comparable, while properties in Pamporovo and certain resorts along the Northern Black Sea coast are more affordable.

North of Varna, prices vary widely due to differences in quality and scale among complexes. Properties in this area range from 500 to 600 euros per square meter to as high as 800 to 1,000 euros per square meter.

April 25, 2024
Stability Reigns: Sofia Real Estate Market Thrives Despite Uncertain Times

The real estate sector in Sofia has shown resilience in the face of ongoing pandemic challenges, maintaining stability across all segments in the first quarter of the year. According to data from the consulting firm "Colliers," returns from residential properties held steady at 4%, while offices and commercial areas saw a return of 7.75%, and industrial properties yielded 7.5%. Despite global economic fluctuations, the total investment volume in Sofia's real estate market reached an impressive 12.3 million euros.

Sofia boasts a significant inventory of high- and medium-high-class apartments, with 16,540 currently available and an additional 5,250 under construction. Despite this supply, average offer prices have remained unchanged, with two-bedroom apartments priced between 180 and 230 thousand euros, terraced houses ranging from 320 to 450 thousand euros, and detached houses priced over 490 thousand euros.

Rental prices have also maintained stability, with two-bedroom apartment rents ranging from 1,000 to 1,300 euros per square meter, and house rentals exceeding 2,200 euros per square meter. In the office sector, rents for class A spaces saw a slight increase to 15 euros per square meter per month, while class B rents remained steady at 10 euros per square meter per month. Despite ongoing construction efforts, unoccupied office spaces account for approximately 15% of the market.

The flex office segment in Sofia has seen considerable growth, with average monthly rents ranging from 150 to 220 euros per square meter depending on the type of workspace. With 63 operators offering a total of 8,717 jobs, the flex office sector represents a significant portion of the market, comprising 3.4% of the total office space.

Meanwhile, rental prices in shopping malls, main shopping streets, and retail parks have seen an upward trend, reaching 43 euros, 56 euros, and 11 euros per square meter per month, respectively. Although no new projects are planned for shopping centers, construction is underway for 70,700 square meters of retail park space. Despite this growth, the share of vacant space in shopping malls has decreased to 2.5%, while main shopping streets and retail parks have remained relatively stable at 1% and 3.3%, respectively.

April 25, 2024
Bulgarians' Real Estate Investments Reach 59 Countries

Bulgarians possess properties in 59 nations worldwide, with real estate holdings spanning every continent except Antarctica. These holdings include residences on exotic Caribbean islands like Aruba, the Netherlands Antilles, and the British Virgin Islands.

As of 2022, the count of fellow countrymen who purchased real estate overseas reached 2,154, based on data from the National Revenue Agency referenced by "Telegraph". Information for the year 2022 is the most recent available. Declaration of properties for the end of 2023 is currently underway, with the deadline set for April 30th.

By the end of 2022, 599 individuals who declared property abroad had purchased more than one property, and 362 declared rental income from their overseas properties.

Greece tops the list with 2,184 properties owned by Bulgarians, with landlords earning a total of BGN 1,298,894 in rental income in 2022. Germany follows closely, with 171 properties and BGN 2,227,594 in rental income, while Spain ranks third with 159 properties and BGN 1,182,091 in rental income.

Austria and Great Britain have also favored destinations, with Bulgarians owning 113 and 100 properties, respectively, and earning significant rental incomes.

Despite the growing popularity of Dubai, only 29 Bulgarians have officially declared properties in the United Arab Emirates, generating BGN 398,719 in rental income.

Exotic islands remain attractive, with Bulgarians owning properties in Aruba, the Dominican Republic, the British Virgin Islands, and the Netherlands Antilles.

Thailand, with its allure, has only three properties owned by Bulgarians, while properties in Africa, Australia, and Japan are also on the list.

The National Revenue Agency tracks properties owned by Bulgarians abroad, even if not officially declared, through automatic exchanges with EU member states. Residents are required by law to declare rental income from foreign sources in their annual tax returns, providing details of property ownership.

The exact number of properties cannot be accurately provided because one property may be declared by more than one person with corresponding common shares.

April 20, 2024
Home Sweet Home: The Reality of Housing in Bulgaria Revealed

New data from the National Statistical Institute (NSI) sheds light on the housing landscape in Bulgaria, painting a picture of the majority of Bulgarians residing in older homes.

In a surprising revelation, a staggering 90.5% of households in Bulgaria were found to be living in homes constructed before 1990, according to the latest NSI statistics. Of these, a significant portion—73.6%—were built between 1961 and 1990, highlighting the prevalence of aging infrastructure in the country. Only a small fraction, 9.5%, of households reside in homes built after 1990, indicating a slower pace of new construction in recent decades.

The data also provides insights into housing tenure and amenities across urban and rural areas. A striking 87.9% of households in Bulgaria live in their own homes, while 7.8% utilize housing without paying rent. Meanwhile, 4.3% of households occupy rented accommodation, with variations between free and municipal rent. Additionally, 8.8% of households own a second home, reflecting diverse property ownership patterns.

When it comes to the size of dwellings, the majority of households—68.4%—reside in two- and three-room homes, with notable disparities between urban and rural settings. While 74.4% of city dwellers live in such accommodations, the figure drops to 50.0% in villages. Moreover, a significant proportion of households, 19.7% in cities and 48.0% in villages, reside in larger dwellings with four or more rooms.

The disparities extend to amenities and infrastructure, with notable differences between urban and rural areas. Access to central sewage is significantly higher in cities, with 96.2% of urban homes equipped compared to 45.6% in villages. Similarly, households in cities are more likely to have a toilet inside their home, with 99.2% compared to 87.4% in villages.

In terms of heating, 20.3% of homes in the country have central heating, with a higher prevalence in cities (26.6%) compared to villages (1.2%).

As the data unveils the housing realities in Bulgaria, it prompts considerations for future infrastructure development and urban planning initiatives to address disparities and ensure equitable access to quality housing for all citizens.

March 27, 2024
Surge in Home Loans Sets New Record in Bulgaria

Bulgaria has witnessed a remarkable surge in home loans at the beginning of the year, with loans for households for the purchase of houses and apartments reaching a record high of BGN 20.52 billion by the end of February, according to data from the Bulgarian National Bank (BNB). This represents a staggering growth of over 22 percent compared to the previous year, marking an unprecedented expansion in housing loans.

The significant increase in mortgages can be attributed to several factors. Firstly, there is a growing demand among individuals to upgrade to larger or more desirable homes. Additionally, many people are looking to invest their savings in real estate but lack the necessary funds to make a purchase outright. As a result, they turn to bank loans to finance their property investments. The prevailing low interest rates on home loans serve as an additional incentive for prospective homebuyers, fueling further growth in the housing market.

Consumer loans have also experienced a substantial uptick, growing by more than 13 percent year-on-year to reach BGN 17.2 billion by the end of February. A significant portion of these loans is directed towards home renovations, as well as the purchase of furniture and household appliances. Evidently, the desire for improved living conditions remains a driving force behind the surge in bank lending across the country.

Interestingly, households are borrowing significantly more than businesses, with loans to households growing by 17.1 percent over the year to reach BGN 39.4 billion. In contrast, business loans saw a more modest increase of 8 percent, totaling BGN 44.8 billion by the end of February.

In addition to increased borrowing, households are also bolstering their savings in banks. Over the past year, deposits from citizens surged by BGN 7.85 billion, marking a notable increase of 10.8 percent to reach BGN 80.8 billion. Meanwhile, deposits from non-financial enterprises grew at a slower pace, increasing by only BGN 2 billion or 5.1 percent to reach BGN 43 billion.

March 25, 2024
Bulgaria's Housing Market Sees Varied Growth in Fourth Quarter of 2023

The housing market in Bulgaria witnessed mixed trends in the fourth quarter of 2023, with overall prices experiencing a modest increase of 1.2%, according to the latest data released by the National Statistics Institute. While this marks a slowdown compared to the preceding quarter's growth of 2.7%, the market continues to show resilience amid evolving economic conditions.

Stara Zagora emerged as the frontrunner in terms of price appreciation, recording a substantial jump of 8.2% in house prices. Following closely behind were the cities of Burgas and Varna, registering increases of 6.3% and 1.7%, respectively. These figures underscore the regional disparities within Bulgaria's housing market, with certain areas experiencing more robust growth than others.

However, not all regions witnessed an upward trajectory in housing prices. Both Plovdiv and Sofia saw marginal decreases, with prices dipping by 0.5% and 0.1%, respectively. Despite these localized declines, the overall market remains buoyant, supported by sustained demand and favorable financing conditions.

Looking at year-on-year trends, Bulgaria's housing prices exhibited robust growth, increasing by 10.1% compared to the same period in 2022. This uptick follows a previous quarter's growth rate of 9.2%, signaling sustained momentum in the housing sector.

The data reflects the dynamic nature of Bulgaria's housing market, influenced by a myriad of factors including economic indicators, demographic trends, and regional dynamics.

March 8, 2024
Bulgaria Sees Surge in Mortgage Loans: Record-Breaking Growth Fuels Property Market

Bulgaria witnessed a staggering surge in mortgage loans in 2023, totaling a monumental BGN 6.39 billion. This unprecedented figure, revealed by the Bulgarian National Bank, marks a remarkable 18.77% increase from the previous year, fueling optimism within the property market.

The robust growth in mortgage lending reflects a buoyant property market, with individuals and businesses alike capitalizing on favorable financing conditions. Notably, the total volumes of new mortgage loans surpassed the BGN 5.38 billion mark recorded in 2022, underscoring the nation's burgeoning real estate sector.

Behind this impressive growth lies the significant contribution of non-affiliated registered credit intermediaries, who played a pivotal role in facilitating BGN 2.12 billion in mortgage loans. Their involvement reflects a broader trend of increased consumer confidence and demand for financial services in Bulgaria.

Maria Petkova, Chairperson of the Association of Credit Intermediaries in Bulgaria, emphasized the importance of credit intermediaries in providing high-quality service and ensuring regulatory compliance. With their expertise and guidance, borrowers can navigate the complexities of mortgage financing with confidence, she explained.

Despite the surge in mortgage lending, Bulgaria maintains a prudent approach to household debt, with households boasting one of the lowest loan-to-asset ratios in the EU at 14.7%. This cautious approach, coupled with robust deposit growth, underscores the nation's financial stability and responsible borrowing practices.

Looking ahead, industry experts anticipate continued growth in mortgage lending in 2024, signaling sustained momentum in the property market. With favorable financing conditions and strong consumer demand, Bulgaria remains poised for further expansion and development in the real estate sector.

February 26, 2024
Eurozone Entry: Implications for Bulgaria's Real Estate Sector

Amidst the backdrop of Bulgaria's dynamic real estate landscape, all eyes are on the potential impact of the country's imminent entry into the Eurozone. The bustling market in Sofia, Bulgaria's capital, kicked off 2023 with a noticeable decline in transactions, hovering around 14%. However, subsequent quarters saw a gradual improvement, with reductions limited to 11.7% and 5.4%, respectively, as reported by the Registration Agency. Despite these fluctuations, the broader national picture reveals a decrease of 7.4% in transactions compared to the previous year, amounting to 62,398 reported deals by the year's end.

As speculation mounts regarding the implications of Eurozone accession on Bulgaria's property sector, Bloomberg TV Bulgaria sought insights from industry experts. Polina Stoykova, the executive director of BULGARIAN PROPERTIES, shared her perspective on the matter. Stoykova highlighted Bulgaria's extensive preparation for Eurozone integration, emphasizing the country's familiarity with euro-based transactions spanning two decades. From pricing structures to notary deeds, the real estate market has long accommodated transactions in euros, minimizing anticipated disruptions upon adoption.

However, Stoykova emphasized that the real impact of Eurozone entry lies in its effect on supply and demand dynamics. Notably, she anticipates heightened foreign interest, particularly from investors and buyers. With recent years witnessing a decline in foreign engagement, Stoykova foresees a resurgence of interest, rendering Bulgarian property more appealing to both individuals and institutional investors. This anticipated surge in demand could inject vigor into the market, revitalizing activity and potentially driving property prices upward.

Moreover, Stoykova underscored the pivotal role of mortgage and deposit rates in shaping market sentiment post-Eurozone entry. The banking sector's response to the transition will be critical, particularly concerning the recalibration of interest rates on new loans. Stoykova highlighted the current variability in interest rate formulas across banks, emphasizing the need for clarity and consistency in post-Eurozone lending practices. Additionally, she stressed the significance of deposit interest rates, which, if affected, could influence investment decisions and overall market liquidity.

In essence, Bulgaria's imminent entry into the Eurozone promises to usher in a new era for its real estate market. While technical adjustments may be minimal, the broader implications on supply, demand, and financing mechanisms are poised to reshape the sector's landscape. As stakeholders await further developments, anticipation is rife regarding the transformative impact of Eurozone accession on Bulgaria's vibrant property market.

February 2, 2024
Bulgarian Housing Market Predictions For 2024: Stable Year And Increase In Prices

According to Yavor Peychev, CEO of “Imoteka” a part of the “Realto Group”, Bulgaria can expect a stable year, with the number of real estate transactions remaining similar to that of 2023, and a gradual increase in prices for quality newly-built properties in major cities. This information was shared during the presentation of data on the current state of the market to journalists.

The expert confidently expressed the belief that new construction and high-quality properties will continue to experience moderate growth, and this growth will be maintained between 2-6%, or at least notably so in the first half of the year. He pointed out that mortgage financing will remain a key factor for buyer motivation, as he does not anticipate a sharp increase in interest rates. According to him, this means that funds will be accessible to buyers. Peychev emphasized that even with an increase in interest rates by 0.3%, 0.6%, or even one percent, it will not have a substantial impact on buyer behavior.

Yavor Peychev acknowledged that it's possible for some people to prefer renting, which could stimulate this sector of the market. However, he emphasized that the number of transactions and buyer activity will remain stable, despite expectations for euro adoption and Bulgaria's entry into the Schengen zone, which he considers positive factors, encouraging Bulgarians in their decision to buy property. Additionally, with the control of inflation in the country and the slight increase in demand compared to supply, the expert predicts that we can expect a stable year.

January 31, 2024
Russia: We Will Take Revenge On Bulgaria For Taking Away Our Real Estate

Russia has issued a stern warning in response to Bulgaria's recent legislative efforts aimed at seizing Russian real estate. Deputy Secretary of the Russian Security Council, Nail Mukhitov, declared in an interview with TASS that Russia will not tolerate such actions and vows to respond.

Mukhitov criticized certain Bulgarian politicians for what he perceives as aligning themselves with Washington and London, accusing them of attempting to erase historical ties between the two nations. He pointed to recent controversies, such as calls to remove the monument to the Soviet soldier 'Alyosha' in Plovdiv and efforts to expunge references to Russian help from history textbooks.

The latest development involves a bill proposed by MPs from the party "Democratic Bulgaria," Ivaylo Mirchev and Nadezhda Yordanova. The bill aims to facilitate the return of the "Kamchia" sanatorium and rehabilitation complex and freeze Russian properties owned by individuals sanctioned by the EU.

Mirchev explained the rationale behind the legislative initiative, emphasizing the need for Bulgaria to align with international sanctions against Russia, particularly in light of the ongoing conflict in Ukraine. He highlighted that such measures have been in place since 2014, with additional sanctions introduced in response to Russia's continued aggression.

The proposed bill also includes provisions for maintaining a public list of sanctioned individuals on the Ministry of Foreign Affairs' website to safeguard the rights of third parties.

January 11, 2024
Analyst Warns of Potential Speculative Property Price Surge in Bulgaria Amid Eurozone Entry

Petar Mastikov, Chief Analyst at the Bulgarian National Registry for New Constructions and Reconstructions, has sounded a cautionary note, expressing concerns over a possible speculative surge in property prices across Bulgaria once the country enters the eurozone. Mastikov envisions a short-term upswing, less intense than the notable peaks observed in the past two years, followed by a subsequent stabilization in the real estate market. For the year 2024, he projects a growth range of 2% to 5%, citing the impending eurozone entry and full Schengen membership as driving factors.

While a slight cooldown is expected in residential construction, with a projected decline of up to 5% in 2024, office space appears poised to maintain its momentum, with an expected continuation of the 30% growth trend witnessed in 2023. The holiday construction sector is anticipated to see a significant surge, with projections exceeding 20%, a surge attributed to the anticipated positive impacts of Bulgaria's Schengen membership, with contributions expected from the Romanian market.

Mastikov highlights that 2023 marked a significant milestone, recording the highest volume of new construction in all functional segments since 2008, totaling 7,650 million sqm of useful floor area. Despite a year-on-year decrease of 6.56% in residential construction, other segments, including public and specialized buildings, hotels, and holiday spaces, experienced growth, effectively compensating for the slight decline in the residential sector.

The analyst underscores the rapid recovery in the office buildings segment, driven by the widespread return of employees to offices, leading to increased demand for high-quality workspaces. Holiday construction, especially along the southern Black Sea coast, demonstrated a renewed interest in 2023, with positive growth expectations for 2024, fueled by Bulgaria's Schengen membership, particularly benefiting from the Romanian market.

In 2023, specialized buildings such as hospitals, kindergartens, and schools recorded significant investment activity, marked by the launch of 16 hospital projects, predominantly in the private sector, but also encompassing state and municipal initiatives. The hotel construction sector experienced an impressive nearly 100% increase in 2023, escalating from 70,000 to over 140,000 sqm of useful floor area, with optimistic projections for sustained positive trends in 2024.

Retail space witnessed a 4% upswing in 2023, marked by the launch of construction projects totaling 400,000 sqm, primarily concentrated in retail parks. While Sofia maintains its leading position in new construction, Plovdiv and Burgas have emerged as dynamic regions, with Ruse and Pleven experiencing notable growth. The analyst anticipates that the development of highway links connecting Sofia, Pleven, and Ruse will contribute to a distinct trend in industrial construction.