Bulgaria's Housing Market : assessing problems before euro membership
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Loading... - Borislav Petrovic
- 23 Sep 2022
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After six years of strong house price rises, Bulgaria’s housing market remains vibrant. The nationwide house price index rose by 7.51% (6.83% inflation-adjusted) during the year to Q1 2021, accelerating from a y-o-y rise of 4.7% during the same period last year, which was the strongest house price growth in three years.
Prices of new dwellings rose by 6.7% during the year to Q1 2021, sharply up from the previous year’s 2% y-o-y rise. When adjusted for inflation, prices increased by 6%. During the latest quarter, prices of new dwellings were up 3.4% (2.5% inflation-adjusted).
Prices of existing dwellings rose by 8% (7.3% inflation-adjusted) in Q1 2021 from a year earlier, the biggest y-o-y growth since Q1 2018. Quarter-on-quarter, existing house prices increased 3% (2.2% inflation-adjusted).
In recent years almost zero interest rates on bank deposits have encouraged people to invest in real estate. That’s why the housing market started to rise in 2014 and has been accelerating ever since, recovering from a massive crash after the boom from 2000 to 2008, when residential property prices surged around 300%.
The economy is projected to grow by 4.6% this year and by another 4.1% in 2022, after declining by 4.2% during 2020 In Q2 2021, Bulgaria’s economy expanded by 9.9% from a year earlier, following a 1.8% contraction in Q1, according to NSI. It was the first quarter of y-o-y expansion in five quarters, mainly due to the low base effect from the pandemic shock last year. Read More...
