2003 and 2004 registered the highest property capital growth in recent Bulgarian history. The growth was 30% and 42% respectively. 2005 was the year when the market stabilised and stilled registered a healthy 10% growth. This trend continues through 2006 too. The main factors responsible for the current development are:
Elements of oversupply of new housing and apartments, especially in major holiday resorts Competitive mortgages and a trend towards interest rates similar to most European economies The ratification of Bulgaria’s EU accession talks by EU member-states and the actual accession in the EU, scheduled for 1 January 2007
End of 2005 and 2006 also featured a beginning of market segmentation, where other factors but the “buy quick” approach started to be taken in consideration. Buyers are beginning to consider infrastructure, public transport, shops and restaurants and environmental factors and not only the price.
Sofia is still by far the biggest property market in Bulgaria. As in previous years, greatest demand is for small studio and one bedroom apartments. The biggest property prices growth is for small studio – 9%, followed by one-bedroom flats – 5%, and two- and three-bedroom apartments (1% – 3%). Studio flats are traded at an average of €917/sq.m. whilst three-bedrooms apartments have asking prices of €730/sq.m.
Most brokers expect a steady rise of an average 10-12% for most major cities and probably higher growth for the smaller regional centers.