The Bulgarian Real Estate Market: 2024 in Review and What Lies Ahead in 2025
The year 2024 kicked off with a multitude of questions and uncertainties, with many questioning what the future held for the Bulgarian real estate market. However, Polina Stoykova MRICS, Executive Director of BULGARIAN PROPERTIES, has reported a significant success story despite these challenges.
Initially, there was much speculation surrounding whether mortgage interest rates would increase, when Bulgaria would join the Eurozone, whether inflation would stabilize, and how this would impact the real estate market. Fortunately, many of these negative predictions failed to materialize. Mortgage interest rates remained at historic lows, driving a surge in demand and consequently, a rapid acceleration in property price increases, particularly in the second half of the year. By the end of 2024, the market witnessed annual growth rates of 10 to 15 percent in various regions throughout the country.
Key trends emerging from 2024 include a persistently strong demand that outpaces the available supply, primarily due to new construction struggling to meet all needs. Nevertheless, new residential building remains the preferred choice for buyers over the past decade. This trend is expected to continue.
Looking Ahead to 2025
Heading into 2025, the market will continue to grapple with its unknowns, but the underlying fundamentals appear strong. The supply of properties may continue to lag due to lingering uncertainty surrounding Bulgaria’s potential entry into the Eurozone. However, significant demand is likely to persist due to the availability of mortgages, albeit under a more regulatory framework by the Bulgarian National Bank.
The labor market, too, is poised to continue supporting strong demand, with low unemployment rates and rising salaries expected. Nevertheless, the pace of growth may start to slow.
Empirical research indicates that the volume of issued housing loans and the momentum in price increases are the most significant driving factors for the market. Hence, the first half of 2025 is expected to unfold largely in line with what 2024 delivered.
Polina Stoykova concludes, "I anticipate another strong year for the real estate market in 2025, where I hope the market can achieve a more balanced and stable state, thus maintaining the confidence and desire of buyers to invest in properties."