Growth in the Property Deals in Sofia and Other Big Cities

A record number of residential property transactions in Sofia was reported last year, as the market grows from 2012 onwards and the number of transactions reaches two thirds of the levels of the property boom in 2008, according to the Registry Agency. Sales in the largest and most dynamic market in the country - the capital - grow by 8.6% YoY in 2016. The number of purchases of mortgage is higher by 23.6%. Traditionally the most active last quarter also shows an increase in transactions in the capital - by 11.8% and mortgages - with 25.4%. The data supports the observations of the real estate agencies.

They accounted for more deals and increase in prices. The reasons - economic recovery and low interest rates. The country trend shows a slight delay, according to data reported there’s a decline in total sales volume by 0.75%. In mortgages, however, there’s an increase by 1.6%, as their total number in 2016 reached 50 484. The statistics cover all properties - whole retail, office and industrial buildings to land, but the largest share traditionally falls on the apartment market. Therefore interpretation of the data is that growth rates reflect the purchases of residential property.

The expectations of the sector for the coming period tend to stabilise and moderate the construction activity in Sofia. The forecast for market development in major cities outside the capital is positive and the economic processes and migration to the capital suggest it will continue to be the most active market in 2017.

High season in the big cities

Last quarter several large cities have reported a significant increase in transactions annually. According to the Registry Agency the period from October to December was particularly active in Varna, where the increase in the number of trades is almost 32%. Plovdiv continues the trend of growth, but now more moderately - by 8.75%. Following are Bourgas and Rousse respectively with almost 5% and 4% growth. Following major cities with between 1,000 and 1,500 deals for October to December are Yambol, Pazardzhik, Stara Zagora, Sliven, Kazanlak and Veliko Tarnovo. Lowest number of transactions (between 30 and 50) for the fourth quarter were concluded in cities like Tran, Ivaylovgrad, Malko Turnovo, Zlatograd, Ardino.

Varna - the largest annual increase

The total number of deals in Sofia for the year is 26,480, which is comparable to the level of the first crisis year - 2009 and close to 65% level of the strong 2008. The past 12 months have been positive for the market in Plovdiv, where in 2016 the deals are with 6.65% more compared to those registered in 2015 - about 15 780. in Varna the total transactions for 2016 are 11,813, which is almost 12% more than the previous year. In Bourgas there is also a slight increase in transactions - by 1.25%.

More mortgages

In the last quarter a strong growth in the mortgage transactions is reported. In 2016 their number reached more than 50,484 nationwide, which is nearly 32% more YoY. In Sofia only in the last quarter, the number of mortgages reached 4577, an increase of 25.4% compared to October-December last year.

Increase of the prices

The market in the capital goes up and so do the prices. "For the first time since 2008 we measure double-digit growth in the property prices in Sofia - around 12 percent," said in its annual report for 2016 Polina Stoykova, Executive Director of Bulgarian Properties. The active year for the capital market allows the experts to expect continued, but more moderate price growth in the capital in 2017. "We expect an increase of no more than 10%," said Anton Andonov, CEO of "ERA Bulgaria".

This forecast is confirmed by Stoykova, as she believes that the growth in the number of transactions will be more significant than the increase in property prices and the appreciation will be within 10% this year. The expected upturn in other cities is also to continue and to reflect the prices. According to forecasts of Andonov the prices in the big cities will also rise, but unlike this year's lagging behind the capital, in 2017 there is a chance to equalize the price growth in some of them. As a basis for that he indicates the economic factors operating in Sofia, but manifested with a delay in other cities. "Our expectations for the prices in Varna and Bourgas are to move like in 2016 and they’re also likely to rise to about 4-5%," said Dobromir Ganev, Director of "Foros - national real estate company." Experts’ forecast for Plovdiv is for growth of 4-6%.

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