The real estate market in Bulgaria is entering a more selective phase – the number of deals is decreasing, but prices continue to grow, and buyers are paying more and more attention not only to the square footage and location, but also to the quality of construction, infrastructure and living environment.
The market is “at two speeds“
“The real estate market in our country is at two speeds“, commented Assoc. Prof. Dr. Miroslav Vladimirov, lecturer at the University of Economics – Varna and member of the Board of Directors of ERA Real Estate. Data from the National Statistical Institute show a decrease in the number of transactions to levels approaching those of 2019, although housing prices continue to rise.
An important detail is that the decline in transactions is mainly due to the lower number of purchases without mortgage financing. This strengthens the importance of bank lending as a factor in the development of the housing market.
Vladimirov outlined three possible scenarios. In the base case, determined as the most likely, mortgage rates could increase by 0.5-0.7%, the number of transactions would remain between 70,000 and 75,000, and prices would continue to grow moderately.
The optimistic scenario assumes that interest rates will remain around current levels, stronger demand and an increase in transactions. The risky option is associated with a significant increase in the cost of credit, which would limit access to housing financing and lead to a more serious contraction in the market.
Will mortgage loans become more expensive?
A significant change in mortgage interest rates in the short term is not expected. According to Ivaylo Valchev, Deputy Director of “Retail Banking“ at First Investment Bank (Fibank), a slight increase is possible in the second half of 2027, which may be mainly related to changes in the structure of borrowers.
Mortgage interest rates are expected to remain relatively stable. Among the factors for this are the methodologies used by banks, low deposit interest rates and the relatively limited set of investment alternatives that Bulgarian households traditionally turn to.
Increasing difference between individual properties
The next two years may bring stronger differentiation to the market. According to Stoyan Gochev, owner of RE/MAX City and RE/MAX City Mall, buyers will become increasingly demanding, and the price difference between old and new construction will be increasingly visible.
Signs of a certain cooling are already present in new construction. The chairman of the National Association of Construction Entrepreneurs, Georgi Shopov, reported a drop of 12-15% in preliminary contracts. His expectations are that the decrease will not exceed 20% during the year.
However, this does not necessarily mean lower prices. According to Shopov, financially stable investors have sufficient capital and, in case of weaker demand, may prefer to temporarily limit sales instead of making discounts. His forecast remains for a continued increase in the price of residential properties.
Buyers no longer only look at the square footage
The criteria for choosing a home are also changing. From BULGARIAN PROPERTIES, they expect more offers on the secondary market, strong demand and a gradual increase in prices. The CEO of the company Polina Stoykova MRICS pointed out that the environment around the property, infrastructure, maintenance costs and the overall concept of the housing project are increasingly important for buyers.
Thus, two properties with similar square footage and location can receive increasingly different assessments from the market depending on the quality of construction, common spaces, access to services and transport and operating costs.
This change also poses a new challenge for construction entrepreneurs - projects must increasingly clearly show what they offer beyond the housing itself and how they differ from competitive offers.
Detailed statistics on average property prices in Bulgaria by cities and neighborhoods can be seen at imot.bg