site.btaPeak Year for Property Prices to Be 2025, Normal Rate to Resume after Eurozone Entry - Real Estate Association Head Bochev

Peak Year for Property Prices to Be 2025, Normal Rate to Resume after Eurozone Entry - Real Estate Association Head Bochev
Peak Year for Property Prices to Be 2025, Normal Rate to Resume after Eurozone Entry - Real Estate Association Head Bochev
National Real Estate Association holding a meeting with the media held a meeting with the media about the real estate market in Bulgaria on the eurozone's threshold (BTA Photo/Ekaterina Toteva)

The peak year in terms of real estate price growth in Bulgaria will be 2025, where the rise is expected to reach up to 18%, as was the case in the first quarter of this year compared to the same period of 2024, said Alexander Bochev, Chairman of the National Real Estate Association (NREA). After Bulgaria's accession to the eurozone, "most likely in 2026 and 2027 we will return to the normal rate of price growth within about 10%," he told journalists here on Tuesday.

The NREA held a meeting with the media on "On the threshold of the eurozone: why regulation of brokers can no longer wait and more - will property prices rise and where is the market going in Bulgaria?".

Alexander Bochev noted that in Croatia, which has been a member of the eurozone since January 1, 2023, over the past 5 years there has been a rise in real estate prices of between 6 and 10%, which is similar to Bulgaria with rates between 9 and 15%. The exception in Croatia is 2022, which is a pre-accession year for the country, when the price rise was 17%, Bochev said. Croatia, however, returned to the normal pace of price rises of 6 to 10% in 2023 and 2024.

"If we rely on the data presented by Bulgaria Properties, by the end of the year the average price per square metre of residential space in Sofia will be higher by at least 10%" said the CEO of ERA Real Estate Anton Andonov. He said that ERA's professional opinion is that Buglaria's entry in the euro area should stop pumping up the positive expectations of the market participants and that in 2026, Bulgaria can return to the fundamental factors that drive the market - the demand to live in newer, bigger and better quality housing. He also pointed out that no economy should be able to afford an average income rise of 15% per year, adding that if these processes calm down, in 2026 the Bulgarian real estate market will not see a fall in prices but much smaller rates of increase: within up to 6% in real terms.

Andonov noted that in 2024, the residential property market was dominated by strong demand, which resulted in a record number of transactions with such properties - about 95,000, which is about 40% above the average median value for the years before the housing crisis. Combined with price increases, this has led to the psychological threshold of BGN 10 billion being crossed for the first time in terms of transactions in nominal terms, with over BGN 12 billion worth of residential property transactions in 2024.

Among the reasons for this trend, Andonov highlighted the steady growth of household disposable income over the past 3-4 years, which outpaced the growth of inflation and property prices, the relatively lowest interest rates in the European Union, which on average over the past few years have been between 2.3 and 2.5%, mainly due to strong competition in the banking sector and the inability to converge interest rates. The third reason is the still-high inflation in previous years, which has prompted people to seek refuge for their money in real estate. And last but not least, the expectation of being accepted into the eurozone as a turning point to determine property prices and people's expectation that prices continue to rise, the expert added.

According to him, the country is at the beginning of the process of overvaluation of the property market, which will continue in 2025, mainly because of people's expectations that prices will continue to rise until our entry into the euro area, the continued low interest rates, which will remain unchanged this year, and the continued growth of household disposable income. The expert pointed out that this was a trend that could not continue in the long term. He predicted that next year, in which Bulgaria is expected to be a member of the eurozone, there will be market incentives to align interest rates between our market and that of the euro area. 

/RY/

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By 12:47 on 05.06.2025 Today`s news

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