Bulgaria: Housing Prices in Sofia continue to Rise

Property prices continue to rise, but there are already signs of a slowdown in growth. It is expected to be more pronounced in the second half of the year, since the more significant increase last year was also registered then.

Both investment buyers and those looking for a property to live in are active on the market. The share of purchased three-room apartments - 42%, is already equal to that of two-room apartments, which last year dominated the market with a share of 70%. Property stays on the market continue to be short, with deals often being completed in a matter of days.

This is shown by the data from the beginning of the year of "Bulgarian Properties".

The agency reports that new property listings are up about 10% from the same period in 2022. This is the first increase since 2019, as the first quarter of 2020 was marked by the pandemic and limited business activity, and after that, the available supply began to quickly run out. The properties that went on the market could not satisfy the increased demand and catch up with the pace of realized sales, according to the company's analysis.

The volumes of newly granted housing loans are also increasing. According to BNB data, after the slowdown at the end of 2022, in the first months of 2023, loan volumes increased by about 20% compared to a year earlier and returned to the growth levels characteristic of the past 2 years of high demand and strong housing market. This is one of the most important factors driving the market and its influence remains positive at the moment.

In the meantime, however, on Wednesday the BNB announced measures that will come into force from the summer and aim to cool credit activity.

The expectations for an increase in interest rates on loans...