The housing market in Sofia in Q1 of 2017 - Prices Increase by 18%

2017 started with an acceleration of the previous year’s dynamics, especially strong since the beginning of March. Price growth is now approaching 20% on an annual basis. This is a significant increase but it must be kept in mind that growth has accelerated since spring last year and we are currently comparing with the lower prices at the beginning of 2016’, commented the market trends Polina Stoykova MRICS, Managing Director of BULGARIAN PROPERTIES.

‘There is no doubt anymore that the market is in an upturn. The main challenge will now be to predict how long this growth will continue and where will be the breakpoint, which is the most difficult to forecast. Surely we can say that we are still at the beginning of the upward curve, with expectations that this trend will continue for at least 2 years. The economic factors contributing to the market upturn are very different from those of the previous booming cycle when foreign demand was the main driver. The market picture looks very good, there are no concerns and this time we can say we have a sustainable growth.’

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‘The average property price in Sofia is now approaching 1000 Euro/sq.m. and has reached the levels from the end of 2007. It took 10 years for the market to regain the positions of the previous boom, but this time with much better economic indicators and the tendency for these levels to remain stable’, Stoykova adds.

Average Prices

The data of BULGARIAN PROPERTIES shows that in Q1 the average price of the sold apartments in Sofia is 985 Euro/sq.m. at 960 Euro/sq.m. in the last quarter of 2016. Thus, quarter-on-quarter basis, the price increase is 2.6% and 18% annually. The average purchase price of the dwellings is around 90,000 Euro.

In early 2016, homes in Sofia were sold at an average of 835 Euro/sq.m. 

At present, property prices in Sofia are at levels similar to those from the end of 2007. The peak values in the third quarter of 2008 have not yet been reached in the pre-crisis boom when the average house price in Sofia reached 1260 Euro/sq.m.

New Construction

The sales of new build homes continue to account for more than 50% of the total sales in Sofia and the interest remains high.

Both buildings in the initial stage of construction and already completed buildings are available for sale. Property prices are rising steadily as construction progresses, and the available homes are running out quickly, so off-plan purchases are very common.

Parameters of the purchased properties

The one-bedroom apartments have regained their attractiveness, which can be explained by their greater liquidity and easy rental, as well as by the rising prices which limit the budgets of the buyers. They account for about 55% of the purchased homes in the first quarter. Immediately after them with a share of 32% of the purchases come the two-bedroom apartments. Multi-family homes and maisonettes are about 10%.

The average area of the purchased apartments is 90 sq.m. Most often apartments on the 2nd to the 6th floor (70% of the sales) are bought. Discounts from the offer prices are minimal - up to 1%.
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