The housing market in Sofia in 2022 - accelerated price growth and low supply
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Loading... - Jakov Saric
- 23 Sep 2022
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In the first half of the year, we observed a real estate market in the Bulgarian capital, characterized by very high demand and insufficient supply. This explains both the accelerated price growth and the slowdown in sales growth.
New construction projects got off to a slower start due to rising material prices and supply difficulties, and those that were on the market were actively selling "off-plan". In addition, many property owners pulled out of the market due to high inflation, and this reduced the supply further.
At the same time, demand continued to be supported by favorable bank lending and rising incomes. Interest rates on mortgage loans continued to fall, and the volume of newly granted loans - to grow, maintaining the pace of 40% growth from 2021.
The other factors that influence the housing market also continued to have a positive impact - unemployment remained at low levels - around and below 5%, and incomes continued to grow - by around 10% on average for the country and 12% for Sofia in the first quarter according to NSI data.
The war and inflation gave an additional stimulus to the demand for investment in a safe asset, such as real estate, and the market felt a housing shortage not only in Sofia, but also throughout Bulgaria. The supply that existed on the secondary market, even in holiday resorts and in the countryside, has greatly diminished and the offers that do come to market now often sell out in a matter of days.
All this has led to an accelerating price growth, which according to BULGARIAN PROPERTIES data reached 21% in Sofia in Q2 of 2022. This represents the fastest increase since 2008. Read More...
