Dynamic. This is how one word can describe the first quarter of 2024 on the housing market in Sofia. “We witnessed one of the strongest quarters in the history of the housing market. This was also confirmed by the data of the Registration Agency, which showed an increase in the volume of sales in the leading urban markets. This year, the market shifted into a higher gear. This was largely expected in view of the still low interest rates on loans, growing incomes, the slowdown in inflation and the pace of property price growth on the one hand, and our expected acceptance into the Eurozone on the other, said Polina Stoykova, Executive Director of BULGARIAN PROPERTIES.
“At the same time, this new dynamic contributed to accelerating price growth after a slowdown at the end of 2023. This can be seen most clearly in the leading city market Sofia, where growth at the end of 2023 was around 3% at annual basis, and 2024 starts with a growth of nearly 7%, she adds.
There are still no indications of a slowdown in banks' credit activity and raising interest rates. This stimulates both those looking for their own home and those who want to get a second home or vacation home.
BNB data shows that the average interest rate of newly granted housing loans in BGN was 2.54% in February, which is comparable to the levels from the beginning of 2023, and for euro loans there is even a drop in the interest rate and it is already below 3%. As a result, the volume of newly granted loans continues to grow. The registered growth in the first two months of this year is nearly 41% on an annual basis.
Two- and three-room apartments are the most sought after and dominate the market. The share of purchased two-room apartments is 57%, and those with three rooms – 40%. There is a decline in the demand for large properties, which appeared after the pandemic.
„Factors affecting the housing market still have a favorable impact. Positive economic growth, low unemployment, rising incomes, low mortgage rates – all this provides excellent conditions for investments in real estate”, said Stoikova.
The slowdown in inflation has weakened its effect on the market, but it has been replaced by fears and anxieties about our acceptance into the Eurozone and how that will affect property prices and people's savings.
„All this leads us to think that demand will remain strong and as a result price increases will be slightly above the expected levels of 5-10%. In general, however, the real estate market remains well balanced and provides opportunities for concluding good deals in 2024 as well.“, the company concludes.
You can see detailed statistics on average property prices in Bulgaria by cities and neighborhoods HERE