Favourite properties (0)
Saved searches
Selected for you
Sign out

Sofia housing market at the end of 2022 - BULGARIAN PROPERTIES' market report

2022-11-23   |  Polina Stoykova MRICS, Managing Director and Head of Research of BULGARIAN PROPERTIES

In 2022 the housing market in Bulgaria became red hot, experiencing price growths which we hadn't seen in over a decade. This is a direct consequence from the high inflation, which has caused house prices to accelerate their growth rate from 8-10% in 2021 to over 20% in 2022.

Throughout the year we have observed a steady demand but insufficient supply. Thus, a significant portion of demand still remains unsatisfied. However, high prices and increased uncertainty are already causing some buyers to withdraw from the market and wait. The results of this are fewer inquiries and a recorded decline in sales volume - indications that the market has begun to cool down.

On this background, new residential building permits have registered a record growth. In the third quarter alone, 450 permits for the construction of new buildings were issued in Sofia, which is significantly above the average levels for the city and a record since these statistics have been kept since 2005. As building permits are one of the early indicators of upcoming changes in housing market cycle, we can be optimistic about it next year - the direction is still upward.

Bank financing remains available and with conditions still unchanged, at historically low interest rates.

Other factors affecting the housing market continue to be positive. Unemployment remains at low levels - around and below 5%, and incomes continue to grow, albeit more slowly than property prices - by around 16% in Sofia in the third quarter on an annual basis according to National Statistics Institute data. This keeps housing affordability at good levels and the market close to its fundamentals.

Average prices and price growth in Sofia

The average price of housing in Sofia in the third quarter, based on actual transactions, according to data from BULGARIAN PROPERTIES, is EUR 1,470/sq.m. compared to 1,425 Euros/sq.m. in the second quarter and 1,200 Euros/sq.m. a year earlier.

This represents a record nominal price growth in Sofia of 23% year-on-year – well above the expected levels for this year and a value not seen since 2008. In one year, the square meter in the Bulgarian capital has become more expensive by 270 Euros, but we can already see that this growth rate is slowing down. Q3 quarterly price growth was around 3%, slowing from over 11% at the start of the year and 5% in the second quarter.

At the end of 2021 prices began to accelerate their growth and from nominal growth around 8-10%, in 2022 they grew at an accelerating double-digit rate above 15%, and subsequently even above 20%.

Due to high inflation, to get an idea of ​​the real house price growth, we need to deduct it (using the Harmonized Index of Consumer Prices). The resulting real growth of housing prices in Sofia is 6.36% on an annual basis. This shows that the large increase in 2022 is mainly due to the high rate of increase in the general price level, while the actual growth is much closer to the expected market development.

At the end of 2021 the prices from the peak in 2008 were reached, and at the moment the apartments in Sofia are being sold for around 200 Euros/sq.m. above these levels.

The average total price of purchased apartments in the 3rd quarter was 115,900 Euros. We see the overall purchase budget levels has not increased a lot, indicating that a peak has been reached beyond which buyers are less willing to buy.

Sales volume

The calculations of BULGARIAN PROPERTIES based on the data of the Registry Agency show that property transactions in Bulgaria marked a decline in the 3rd quarter of 2022. This is the first decline since the market was halted at the start of the pandemic in the Spring of 2020.

The registered decrease compared to the 3rd quarter of 2021 is 7.23% in total for the country and 15.23% in Sofia.

These figures come after the market slowdown we noted towards the middle of the first half of the year and interest cooling due to high prices and insufficient supply. However, it is good to keep in mind that the reduction recorded is compared to record sales volumes achieved in 2021, when transactions growth was between 20 and 30%.

We could conclude that the initiated slowdown and cooling of the market represents a return to the normal pace of market development, which was interrupted by the pandemic and subsequently greatly accelerated in 2021.

Read the full report with detailed data about mortgage lending, affordability index and most sought after areas in Sofia.

View our offers in Sofia

Sell a property with us

Get a free online valuation

  Read more news

Rural Houses in Bulgaria - wonderful in every season!
A real peace of heaven in the Bulgarian countryside! Your own holiday home in a magic world hidden from the stress and the noise of urban life.

Join us on a journey back to nature!
See More
Hot properties in Bansko - the best offers are here for you!
Buy your own property in the top ski resort of Bansko! An all-year-round resort suitable for winter and summer tourism with the best prices in Europe!
See More

More News

latest news
Sofia Housing Market at the start of 2024 - BULGARIAN PROPERTIES' market report

2024 kicked off with a dynamic property market in Bulgaria, and this activity was sustained throughout the first quarter, making it one of the strongest quarters in housing market history. This was confirmed by data from the Registry Agency, which showed an increase in sales volumes in the country's leading markets.

This year, the market switched into a higher gear. T...

18 April, 2024
Company news

Spring is here, bringing new opportunities in the real estate market!

March was a month full of property transactions, reinforcing market activity and allowing us to successfully conclude the first quarter of the year. We witnessed significant movement not only in the major cities but also in our favorite seaside and ski resorts. Additionally, the season for buying rural houses is i...

02 April, 2024
latest news
We've opened a new office in the heart of Dupnitsa: Visit us at Knyaz Boris I Street, No. 1

We are proud to announce the opening of our new office in the city of Dupnitsa, located at Knyaz Boris I Street, No. 1, Floor 1.

This strategic move is part of our mission to be as close as possible to our customers and to provide high quality local service for both buyers and sellers.

In our new office, clients will be able to take advantage of the ful...

28 March, 2024
latest news
Selling property in Bulgaria? Check out what documents you will need!

In a series of materials, we present you with useful information on how to best prepare your home for viewings and how to determine the right price of your property.

Here we will focus on the heart of the transaction. Buying and selling real estate often seems a complicated and cumbersome procedure, requiring a number of documents and communication with various institutions. And buy...

22 March, 2024