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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. This was largely to be expected in view of still low lending rates, rising incomes, slowing inflation and the rate of house price growth on the one hand, and Bulgaria's expected acceptance into the eurozone on the other.
At the same time, this new speed has contributed to an acceleration in price growth after a slowdown at the end of 2023. This can be seen most clearly in the leading residential market of Sofia, where growth at the end of 2023 was around 3% year-on-year, and 2024 started with a growth of nearly 7%.
There is no indication yet of a slowdown in bank lending activity or a rise in interest rates. This is boosting both those looking to own their own home and those looking to get a second or vacation home.
BNB data show that the average interest rate on newly granted housing loans in BGN was 2.54% in February, which is comparable to the levels of early 2023, and for euro loans, there is even a drop in the interest rate, which is already below 3%. As a result, the volume of new loans continues to grow. The growth registered in the first two months of this year is nearly 41% compared to the same period of last year.
Average prices and price growth in Sofia
According to BULGARIAN PROPERTIES, the average price of homes purchased in the first quarter of 2024 in Sofia is EUR 1,650/sq.m., compared to EUR 1,545/sq.m. at the beginning of 2023. Thus, annual price growth in the Bulgarian capital accelerates nominally to 6.8% after a slowdown in late 2023.
The average total price of purchased apartments remains at around EUR 137,000.
Sales volume
BULGARIAN PROPERTIES' calculations based on the data of the Registry Agency show that property transactions in Sofia mark the first growth after several consecutive quarters of decline since 2022.
7298 property transactions have been registered, compared to 6381 in 2023. This recorded 14.4% year-on-year growth, one of the largest increases in transactions in Sofia, and in terms of volume, ranks the quarter among the strongest first quarters for the property market.
BULGARIAN PROPERTIES' data also shows an increase in transactions in Sofia, with a growth of around 20%, including transactions with housing in new buildings.
Housing affordability in Sofia
BULGARIAN PROPERTIES' affordability ratio value at the end of 2023 dropped to 1.03. This indicates that housing affordability in the Bulgarian capital has improved as incomes are rising faster than prices.
The average salary in Sofia reached 3 025 BGN in the last quarter of 2023, so it took about 1 average monthly Sofia salary to buy 1 sq.m. of living space in Sofia. For comparison, in 2008 (at the previous peak of the market), it took 3.4 salaries for purchasing the same area.
Preferred neighbourhoods and their property prices
BULGARIAN PROPERTIES' data shows that the average prices in the most popular neighbourhoods based on actual transactions are:
• Banishora - 1,615 euro/sq.m.
• Malinova Dolina - 1,400 euro/sq.m.
• Krastova Vada - 1,935 euro/sq.m.
• Ovcha Kupel – 1,440 euro/sq.m.
There is activity and home purchases all over Sofia, and this year the trend for lack of sufficient supply on the secondary market remains, although the conditions for selling property are excellent.
At the same time, new construction is developing and trying to offer the market the necessary amount of housing to meet demand, and buyers' preferences are definitely towards new construction. This is why projects continue to sell off-plan, at an early stage of construction and many of the buildings are being sold out by reaching shell stage.
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