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Sofia housing market at the end of another strong year - market report
Sofia's housing market ends 2024 with impressive results, consolidating its position as the leading property market in Bulgaria. There has been a steady increase in prices since the beginning of the year, but the main impetus came in the second half of 2024.
Polina Stoykova MRICS, Managing Director and Head of Research of BULGARIAN PROPERTIES, explains that this growth is largely due to the imbalance between supply and demand, as well as increased interest in buying homes in the context of low mortgage rates.
"New offers on the market are down 10% year-on-year, which is also a continuation of a similar decline in 2023. This is limiting opportunities for buyers, particularly on the resale market where supply is extremely tight," she adds.
Bank lending, which is a major contributor to price growth, has increased 36% year-on-year. By the end of September, the country's banks had granted new loans equivalent to the entire 2023 volume. And lending rates remained unchanged at a historic low of 2.52% on average in the third quarter.
Average prices and price growth in Sofia
According to BULGARIAN PROPERTIES, the average price of homes purchased in Q3 2024 in Sofia was EUR 1,840/sqm, compared to EUR 1,550/sqm at the end of last year. Thus, annual price growth in the Bulgarian capital accelerates nominally to 18.7% (16.3% net of inflation) after a slowdown at the end of 2023.
The average total price of apartments purchased rises to ˆ159,500 from around ˆ140,000 at the end of last year.
For completed homes on the secondary market, the prices at which deals are concluded range between EUR 2,300-2,500/sqm. In the most prestigious areas of Sofia, the values are approaching 4,000 euro/sq.m., which represents a kind of psychological limit for making deals at the moment.
Sales volume
BULGARIAN PROPERTIES' calculations based on the data of the Registry Agency show that property transactions in Sofia grew by nearly 13% in the first nine months of the year. For the first nine months of the year 24,818 transactions were registered in Sofia.
Overall, the property market will end 2024 with a similar number of transactions as in 2023. By this indicator, Sofia is growing significantly against the backdrop of holding levels for the country overall.
Sofia housing affordability
BULGARIAN PROPERTIES' affordability ratio value as of the third quarter is 1.16, which slightly deteriorates due to accelerated price growth and a slowdown and even a slight decline in the average salary. However, the indicator remains at good levels.
View more about the affordability, preferred areas and prices in the full text of the report here
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