The State of The Real Estate Market in Bulgaria
The purchase of real estate in Bulgaria is steady and at a much higher pace than in the other countries of the European Union. These are some of the main conclusions that can be drawn from the latest statistics of Europe. Housing rents are also rising, but it is more moderate. Property prices in the country rose by 5.4 per cent last year.
What is The Reason for This Increase?
Low-Interest Rates on Housing Loans
In recent months, interest rates on housing loans have been at their lowest historical levels. Data from the Bulgarian National Bank show that at the end of February the average interest rates on mortgage loans were at the level of 2.79% compared to 2.82 and 2.81% for the previous two months.
Change in Demand
The pandemic has changed demand in the last 13-14 months. Houses are already in demand both in Sofia and in the villages around the capital or the villa zones, but also gated communities with more greenery. Even the more difficult to sell (mostly from the point of view of their security) homes on the ground floors, but with their green area, are already finding buyers. Working from home, on the other hand, has increased the demand for larger homes, with people wanting to design one of the rooms as an office.
Inflation and The Eurozone
Growing concerns about rising inflation, as well as the future accession of our country to the eurozone. These are also factors that are driving more and more people to invest in real estate.
Purchase of Properties for Investment Purposes
Households’ money on deposits in commercial banks sleeps at almost zero interest rates. The next most popular investment in the country is real estate. Renting a property is a business that many people aspire to. The few funds on the market involved in this process give greater opportunities to people and companies with 1-2 or more properties.
In case you bought a property at the end of 2019, 12 months later you will already have real estate, which has brought you about 8% yield from the increase in prices and between 3 and 6% yield from renting the property. , which is much more than the current record low-interest rates on deposits.
Increasing Material Structure Prices
Another factor for the real estate situation is the increase in construction materials prices. Construction steel has risen by more than 25% per year. Contractors said that not the construction in Bulgaria determines this rise, but far more remarkable factors. Many other materials’ expenses have increased and nobody knows why. These higher expenses will also affect the real estate prices seriously.
A New Regulation About The Access of People With Disabilities
Another factor for the increase in real estate prices is that there will be a new ordinance about the access of disabled people. According to the industry, this ordinance is very impractical and this will only increase the construction costs. The regulation’s mission is to provide disabled people with much easier access to the apartment blocks. All regulations’ rules should be strictly followed. They must meet the requirements for this part of the community. This refers to each apartment in a new multi-family residential building. It will lead to more common areas in the buildings, larger terraces, bathrooms and corridors. When this ordinance is applied, the new buildings’ prices will go higher.
The good news for the constructors is that the regulation was postponed by 12 months. This allows the investment projects made under the old ordinance to be submitted for approval.
Even though the prices have increased, it doesn’t mean that you shouldn’t buy a property. Everybody knows that money spent on real estate is not wasted money. You can choose to keep your property for yourself or rent it out to increase its value gradually. So, if you decide to buy real estate, come on boldly.
Our partners from Grebul can also help you find your best deal. For more than 10 years their team of professionals has successfully consulted and defended the interests of their business partners and customers about purchase sale real estate, rental, market analysis, real estate appraisal and any other services related to the real estate sector.
The organizational structure of Grebul Real Estate Agency is flexible enough to do quality serve of Bulgarian and international corporate clients as well, in addition of that to act for individuals.
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