The residential estate market in Bulgaria cooled down in Q2 2023, with a 15% decrease in the number of transactions compared to the same period in 2022. This was due to several factors, including rising interest rates on mortgage loans, inflation, and economic uncertainty. Buyers have become more prudent, not rushing into purchases, and often negotiating discounts ranging from 5% to 10% off the initial property sale price. These are the conclusions made by Arco Real Estate for Q2 2023.
Despite the decline in the number of transactions, prices for residential real estate in Bulgaria remained high. The average cost for a two-bedroom apartment in Sofia was around €1,600 per sqm and for a three-bedroom apartment, around €1,800 per sqm. According to data from the National Statistical Institute (NSI), the production index in the construction sector increased by 1.0% in May 2023 compared to the previous month.
However, in Q2 2023, there has been an increase in the number of transactions compared to the first quarter of the year. In Sofia, 8615 transactions were recorded, compared to 6381 in the previous quarter. Varna saw 3792 transactions, up from 2813 in the first quarter of 2023. Plovdiv also recorded a growth in transactions with 4175 compared to 3240 in the previous quarter. Burgas also witnessed an increase, with 1736 transactions compared to 1528 in the first quarter of the current year. The total number of real estate transactions recorded throughout the country in the second quarter of 2023 is 54,371, compared to 44,461 in the first three months of the year. This is still a decline compared to the same period in 2022 when there were 63,928 transactions.
In total, 1289 newly constructed residential buildings were completed nationwide, housing 4427 units. Compared to the same period in 2022, there were 18 more buildings, an increase of 1.4%, but the number of residential units within these buildings decreased by 153 units or 3.3%. The average prices for two-bedroom apartments range between €1600 - 1800 per sqm, while for three-bedroom apartments, they hover between €1500 – 1700 per sqm. These values can vary widely depending on the location of the property and its condition. In the central areas of Sofia, for example, prices start from €1800 per sqm, with the average price for the ideal city centre being around 2500 euros per square meter, again depending on the precise location and property characteristics.
In Q2 2023, significant changes in the real estate market in Plovdiv are not observed. According to data from Arco Real Estate, there is a decline in demand, but this does not result in a decrease in prices. Depending on the characteristics and location of the property, average prices can vary from €800 to approximately €1200 per sqm. There was also an increase in demand for houses in Bulgaria during the second quarter of 2023. The average price for a house in Bulgaria was around €1,000 per sqm.
The residential real estate market in Bulgaria is expected to cool down further in the coming months due to rising interest rates on mortgage loans, inflation, and economic uncertainty.
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