By the end of 2024, the number of houses in complexes will reach 1,820, distributed in 113 residential projects. This is evident from Colliers' latest housing market report. There are about 1,420 houses under active construction in over 93 projects, with more than half of the houses concentrated in the ten largest. Preferred locations for this type of property are the southern arc of the Ring Road, as well as the villages of Bistritsa, Pancharevo and Lozen.
During the period under review, the prices of houses in complexes have increased by over 51% since the beginning of 2020, and the costs of their construction have increased by over 65%. Due to this trend, the construction of new projects is shifting to areas where land is available at a lower price. A detached house with a total area of 370 sq m. with an adjacent yard and parking can be acquired for around 500,000 euros including VAT, and a terraced house with a total area of 250 sq m. yard and parking - for 330,000 sq m. including VAT. More details on the topic can be seen in the Colliers report.
The main part of the transactions in this subsegment are for single houses that are not part of a complex. Demand has declined since the peak in 2021 and the pandemic period, when there was increased interest in properties near the capital. The trend for the majority of transactions to be realized with own capital continues.
The gross rate of return at the end of 2024 for a house in a complex when rented out is around 3.9% per year. Speculative buying during construction and subsequent resale at a higher price after completion remains the preferred investment option.
The affordability level (ratio of salary to price per sq m) of houses in complexes, calculated based on the average price per sq m and official statistics on gross salary, is improving. This is mainly due to the increase in wages. By the end of 2024, the indicator is at a level of 0.88 (sq m with one salary).
The trend of searching for houses with sustainable design and innovative technological solutions that also offer a more pleasant living environment continues. As a result, construction developers are expected to increasingly focus on “green“ projects. Accordingly, buyers will maintain their focus on higher-quality projects offering a high standard of living.
Available demand remains stable, which is reflected in a slight increase in prices and the start of new construction. Planned projects are shifting to locations where land is available at an affordable price. Colliers predicts this trend to continue, as the demand of developers will be directed towards large plots of land on which larger-scale complexes can be built. Interest in locations along the southern arc of the Ring Road will remain, despite the significant development of this area. The lack of road and public infrastructure discourages investment intentions in the northern part of the city. Continued interest in small settlements in close proximity to the capital is expected, due to the opportunity to live in a house with easy access to all the amenities of Sofia.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found HERE