The demand for housing is high, their prices are growing, as is the number of transactions. For the first time in 2024, the number of 95,000 transactions in the segment was reached, which is nearly 40% above the average value for the years before the pandemic caused by the coronavirus. This is also the main reason for crossing the psychological threshold of realizing transactions worth over 10 billion leva.
„There are four reasons for the sustainable growth“, commented Anton Andonov, CEO of „ERA Real Estate“.
- Sustainable growth in household disposable income.
- Comparatively the lowest interest rates in the EU – between 2.3 and 2.5%, as well as the presence of strong competition in the banking sector and the impossibility of convergence of interest rates. For comparison, in the eurozone the price of a mortgage loan is 3-4%.
- The still high inflation in previous years, which led to inertial movements and prompted people to seek refuge in real estate.
- The expectation of being accepted into the eurozone as a turning point for determining property prices.
However, all these factors have also led to the fact that today we are at the beginning of a process of overvaluation of property, which will continue in 2025 due to the fact that people's expectations are that prices will continue to grow.
„In 2025 "There will be no change in mortgage interest rates, but this will probably happen in 2026, when we enter the eurozone. Then there are the so-called equalization mechanisms," Andonov adds. At the same time, the expectations are that interest rates in the eurozone will continue to fall. Where the two levels will meet (ed. note: interest rates in Bulgaria and the eurozone countries! will become clear in 2026 – 2027.
We expect 2025 to be some kind of culminating stage of the 4-year upward trend in the property market. As for 2026, with a decrease in the rate of growth of disposable income, with the reaching of the turning point – the adoption of the euro from January 1, 2026, we believe that it is possible for the market to start looking for its equilibrium point and the number of transactions to drop to about 80,000 units per year,“ predicts Andonov.
Detailed statistics on average property prices in Bulgaria by cities and neighborhoods can be seen HERE