site.btaBulgaria's Real Estate Market: Said to Be Cooling, but Not so Tangible

In the second quarter of 2023, there was word of the Bulgarian real estate market cooling, but this trend was not yet as tangible as in other European countries or the US, the Arco Real Estate agency writes in an analysis. It attributes this largely to the relatively low mortgage rates. Housing price levels remain unchanged, without significant dives for the time being.  

At this point, buyers are much more reasonable and are not in a hurry to purchase a home at any cost, and also in many cases manage to bargain down the initial selling price of the property by 5 to 10%. 

Overall, the market is not expected to experience major changes, with projections limited to a decline in the number of transactions, a slow-down of price growth and cuts in offer prices.

Residential Property Purchases Up

The second quarter of 2023 saw an increase in the number of real estate transactions compared to the first quarter of the year. The 8,615 transactions recorded in Sofia were way up from the 6,381 in the first quarter. The respective figures were 3,792 and 2,813 in Varna, 4,175 and 3,240 in Plovdiv, and 1,736 and 1,528 in Burgas. 

Real estate transactions recorded countrywide in the second quarter of this year totalled 54,371, compared to 44,461 in January-March 2023. The number was smaller than the 63,928 transactions recorded in the like period in 2022.

Despite the reported increases in the second quarter of 2023, transactions have been declining for a fourth consecutive quarter by nearly 15%, year on year.

Larger Apartments in Demand in Sofia

Arco found that in the second quarter of 2023, larger apartments that clients intend to live in are mostly in demand in the capital city. Buyers seek mainly one- and two-bedroom apartments, possibly finished and furnished.

There has been no significant decline in housing prices in recent months, and their high levels persist. A one-bedroom apartment averages between EUR 1,600 and EUR 1,800 per sq m, and for a two-bedroom one between EUR 1,500 and EUR 1,700 sq m. Actual prices can vary widely by location and condition of the property. In the city centre, for example, prices start from EUR 1,800 per sq m and average at around EUR 2,500 per sq m, again varying by the exact location of the property and its characteristics.

Sofia's southern districts and centre continue to top buyers' preferences, as they prioritize convenient access to the metro and above-ground public transport, availability of parking spaces, and proximity to retail chains, kindergartens and schools. 

The second quarter of 2023 witnessed a revived interest in buying houses around Sofia and relatively near the city and in regulated lots for one-family houses. Such properties are difficult to find because of the recent increase in demand and spike in their prices. The company reports a slight decline in the demand for office and retail space during the period covered by its analysis.

Slackened Demand in Plovdiv Area Does Not Press Prices Down 

The real estate situation in Plovdiv, too, remained largely unchanged in April-June 2023. Arco registered a decrease in demand and levelling off of prices.

Average prices vary between EUR 800 and EUR 1,200 sq m, depending on the characteristics and locations of the real estate.

Vacation Properties Average EUR 1,000/Sq M

There was no significant changes in the vacation property markets in the second quarter from the first quarter and, unlike 2022, demand did not intensify. Sporadic queries are made by buyers who are not quite sure what they are looking for and if at all, and interest is slack. 

Real estate prices remain unchanged. High-quality properties in good complexes can fetch around EUR 1,000/sq m, and cheaper ones can be found, too, in less attractive locations and of poorer quality.

Supply is most active in the Sunny Beach resort. Houses and land lots in the resorts themselves are in limited supply.