<\/p>\n
Last year, housing prices in Bulgaria's major cities rose by almost 10 percent – at least according to official statistics. This is one of the fastest rates in the EU, where the average price increase is 4.6 percent per year. Real estate agencies, relying on their own data, report price increases of 10-12 percent. Prices in Sofia, they say, exceeded 1,000 euros per square meter, and in some neighborhoods – 1,300 euros.<\/p>\n
The real estate market in Sofia has already exceeded the level of 2007. The peak of housing prices was in 2008, when after a jump of 28% they reached an average of 1191 euros per year. The growth of housing prices (the average for the country is below 7%, taking into account inflation) is clearly outpacing the economy (around 4%). This raises the question of overheating of the real estate market.<\/p>\n
The acceleration of new construction in recent years has also kept prices down. New building construction (based on total built-up area) increased by 19% in the first nine months of 2017 compared to the same period in 2016, and was almost twice as high as the 2010 crisis.<\/p>\n
All these factors, which are sometimes overlooked in forecasts, keep the price increase below 10% on average in the country. Many people bought their homes on credit because they were confident that prices would continue to rise.<\/p>\n
The main driving force in the market today is a combination of rising incomes and low interest rates. Many people are buying investment properties. They often see buying real estate as a source of income, as an alternative to retirement.<\/p>\n
The contribution of low interest rates is two-sided. On the one hand, interest rates on loans have fallen by more than half compared to pre-crisis rates. The average annual percentage rate (APR) for new loans in the BGN is 4.19% – more than 9% in 2007. The average interest rate is even lower (3.79% in November 2017). However, the APR, which includes all credit costs, is a better indicator.<\/p>\n
For a long time, people refrained from buying a home on credit, and even when prices began to rise, credit intermediaries reported relatively high levels of self-funding. But the latest data from the BNB shows a change in trend: newly issued home loans reached record levels in June and November. While self-funding demand was 15% and even 20% in the autumn, many banks are now providing up to 90% of the property value (under the full responsibility of the borrower and usually for the transfer of wages).<\/p>\n
The problem of demand for investment property is related to the difficulties in calculating and forecasting income from them. This is due to the lack of reliable market statistics, including rent. Based on unofficial data on rent in Sofia, it can be stated that rental income is 5-7% per year.<\/p>\n
Real estate brokers are convinced that the key price factors are location and type of construction, reality has so far shown that much more important is how the economy develops and is managed.<\/p>\n
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Last year, housing prices in Bulgaria's major cities rose by almost 10 percent – at least according to official statistics. This is one of the fastest rates in the EU, where the average price increase is 4.6 percent per year. Real estate agencies, relying on their own data, report price increases of 10-12 percent. Prices\u2026<\/p>\n","protected":false},"author":1,"featured_media":794772,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[262,261],"tags":[],"class_list":["post-343633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bolgariya","category-about-the-countries"],"yoast_head":"