In recent years, the housing market has been driven mainly by buyers. Most of them are turning to new construction housing. There are two main reasons for this. The first is the limited supply of old construction housing that does not need major renovation. The prices of this type of asset are quite high, and when the cost of a major renovation has to be added, the final price becomes very high indeed. The second is the desire of customers to live in a modern home. “Years ago, customers were mainly interested in the location and exposure, but over the years we have noticed that the internal layout of the housing and the functionality of the premises are becoming extremely important“, says Dimitar Savov, executive director of BLD, in an interview with the largest real estate website in our country, imot.bg. What happened to the housing market in Sofia in 2024? What are the expectations for 2025 and why will the “Green Deal“ lead to an increase in the price of these properties? You can read the answers to all these questions in the following lines.
Mr. Savov, how did the new housing market develop in the already expiring 2024?
What we expected happened. The market in the new construction segment of housing maintained its growth, and sales remained stable throughout the year.
The summer months, which are generally much weaker in terms of sales, turned out to be some of the strongest for the company with twice as many sales as the average for the month.
What factorsinfluenced customers to buy properties in the construction stage again?
It is no secret that for Bulgarians, investment in real estate remains the safest and most profitable. We are not surprised that with unchanged mortgage interest rates and rising incomes, the demand for real estate remains strong and even reports growth.
Sales in the first months of the year served as a sure indication that the market will maintain its pace. This gave customers confidence that the so-called possible “bubble burst” would not happen.
At which stage do customers buy the most?
Customers are most active in buying homes in the construction stage under Act 14 and Act 16.
The emphasis in recent years has been on purchasing new construction homes - in this regard, where do you think Sofia will develop? Where are there attractive and well-infrastructured plots for construction?
Our company has a long-term development strategy, secured plots for construction and financing for several years to come. However, the fact is that finding plots in Sofia is extremely difficult and in many neighborhoods there is a lack of supply. The success of our company so far is due to the good reputation, trust that we have built over the years with our clients and partners, quality construction, attitude towards the urban environment and changing the living environment for the better.
It is no secret that the availability of infrastructure and transport connections is extremely important for the success of any project. Here lies the essential difference between being a simple builder and entrepreneur and a responsible investor who, in addition to successfully constructing buildings, puts effort and resources into building roads and streets where there are none. One such example is Manastirski Livadi Iztok, where the company set foot years ago. In parallel with the construction of Mona 1 and the construction of the remaining buildings Mona 2, 3 and 4, the company continued to build streets and create connections with the rest of the city.
How have customer desires changed in the last 4 years?
We can safely say that customer requirements have changed. Years ago, clients were mainly interested in the location and the layout, but over the years we have noticed that the internal layout of the homes and the functionality of the rooms are becoming extremely important in view of the interior solutions that clients want to implement in their home.
BLD has been on the housing market for over 16years - would you like to take a look back at the most significant changes that have occurred during these years?
Today, clients are already extremely eroded and thoroughly research the investor from whom they have decided to buy. Certainly, the company's successful history and portfolio of 11 completed residential projects, over 1,100 new homes built over the past 16 years and 6 more projects at the planning and construction stage have created a serious reputation for the company and are the reason why clients come back to us again. We are proud that 49% of our customers are loyal, have returned for a second purchase or have come to us through a recommendation from a friend.
The company is bold in implementing new business concepts. 2 years ago, BLD successfully rented out an entire entrance of a newly built building in Manastirski Livadi with the Built to Rent concept. Under the BLD Living brand, clients can rent from a studio to a three-room apartment in the Mona 2 building in Manastirski Livadi East. BLD Living is the ideal solution for people who are temporarily relocated to Sofia, those who are in the process of renovation or for young people who want to live independently. And this is not a typical apartment to rent, because BLD pays all your utilities for the month and also takes care of cleaning the apartment.
After the success of BLD Living, which enjoys more than 90% monthly occupancy, we decided to offer an absolutely new investment product for the Bulgarian market - Aviva Living. With the perfect location of the building behind the Russian Monument, right in the center of Sofia. A few months ago, the company announced over 90 fully furnished apartments for sale, which customers buy with a guaranteed rent.
We are observing a change in mentality among customers and the formation of a segment of business travelers for whom purchasing a home is not a goal, and renting a premium home that is serviced and taken care of by a company is becoming the ideal solution.
Facility Management – the company provides us with a 360-degree service model, which includes maintenance of the common areas and the overall appearance of the building, as well as organizing condominium ownership and its management. We believe that this is our exceptional advantage, which can only guarantee the quality and peace of mind of our customers.
In conclusion of our conversation, I cannot help but ask you, in this dynamic market, which leads to a large extent to unpredictability, what to expect in the New Year 2025. on the housing market?
The new European regulations related to the “Green Deal“ and the goals to reduce carbon emissions by up to 55% by the end of 2030 will inevitably lead to an increase in the cost price of new homes, which must meet strict requirements regarding the materials used and system solutions. This is not a trend, but a new norm that all investors in Europe and worldwide will have to comply with.
The “Green Deal“ will make the difference between new and old residential buildings even more drastic – not only in terms of living comfort, but also in terms of responsible behavior. There are also changes that we have yet to observe – In order for this line to be sustainable, banks will also change their lending conditions for housing in buildings that do not meet the requirements for energy efficiency and decarbonization of the economy.
This is a trend that has been imposed in the last few years. We strongly believe that a necessary condition for maintaining quality construction is high-quality facility management. Construction companies are increasingly starting to offer the service of servicing the building after its construction.
Detailed statistics on average property prices in Bulgaria by cities and neighborhoods can be seen HERE