The housing market in the coming year will be more difficult to predict in the medium and long term. The reason is that the factors that shape it are entering a process of gradual change. The good news is that no significant and abrupt shocks are expected, but rather a gradual adjustment of all participants to the changing conditions.
„The seller-dominated market that we have witnessed for several years will change. Supply and demand will balance, and buyers will be slower to make their purchase decisions. The main reason for this is the questions related to Bulgaria's entry into the eurozone, as well as the new conditions that some banks are starting to offer,” commented Gergana Tenekedzhieva, CEO of ADDRESS.
According to her, some banks are already stimulating deposits, offering 3.5% interest for amounts over 100,000 leva. This could cause those buyers who do not need a home, but are looking for profitability and security of their investments, to remain passive in relation to the property market in 2025. At the same time, the improved deposit conditions will provoke some people who bought property for the purpose of profitability to decide to sell.
„Despite the calming down of the market and less active buyers, there will be no drastic drop in the number of transactions. People buy for personal use and as long as they have good incomes, purchases will happen. Despite speculation that housing affordability will deteriorate, we should not forget that from January 1 the minimum wage will increase again”, Tenekedjieva adds.
According to her, the movement of price levels depends on transactions, but due to pressure from the eurozone, we are likely to witness additional increases. This increase will gradually dissuade some buyers from their intention to buy now.
“If market participants manage to adapt quickly to the changing conditions, we will have an active market in the next 12 months. At the moment, there are no significant increases in mortgage interest rates. In large cities, housing will be sold faster in areas with good infrastructure”, Tenekedjieva explains.
The new construction market will be the main driver for transactions. “Some sellers on the secondary market are taking a wait-and-see approach. Despite the high prices at the moment, they believe that after the adoption of the European currency, they will be able to sell their homes at higher levels. It is advisable to think, however, whether they will then be able to find a suitable buyer for their property, especially if it is not attractive enough”, Tenekedzhieva also says.
In the event of a possible delay in purchases, the rental market will strengthen. Smaller apartments will be particularly sought after, which will be sought by young families who cannot yet afford their own home. This will put pressure on their rental levels, while three-bedroom or larger apartments will experience a smaller price adjustment.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found HERE