Apartments in Sofia rose in price to an average price of 1,545 euros per square meter, according to data from a real estate company, Trud writes. Over the past three years, housing prices in the capital have grown by nearly 40 percent. Among the reasons for this is the high demand for real estate and the rising cost of construction as a result of rising material prices and labor costs.
The average price of apartments bought this year in Sofia has risen to 132,800 euros, compared to 115,500 euros in 2022. This shows that market activity has shifted to larger apartments against the background of the prevailing purchases of two-room apartments last year.
The main reason for this is that most buyers are currently choosing a home for their family. While last year, transactions aimed at investment and protecting the saved money from high inflation prevailed. When a person buys a home for his family, he prefers to have more rooms. But when buying for the purpose of investment, two-room apartments are more profitable, because it is easier to find a tenant for them, and their prices are lower.
Apartments continue to rise in price due to inflation. In addition, the supply of homes for sale is also increasing this year, which leads to a balancing of the market, brokers comment. Last year, the properties that came on the market could not meet the increased demand, which led to a significant increase in prices.
The increase in housing loans granted by banks and low interest rates are a positive factor for the real estate market. The other macroeconomic factors affecting the housing market also continue to have a positive impact – unemployment is very low and people’s incomes continue to rise. The increase in income keeps the ratio of apartment prices stable to the average income, which makes housing in Sofia much more affordable compared to properties in the capitals of Western European countries. As a result, over 92% of the people in the country live in their own homes, while in economically more developed countries there is a large share of people who cannot afford to buy a home and live in rent.
Inflation continues to be a significant driver of real estate investment growth, especially amid continued low interest rates on bank deposits and limited safe investment alternatives.
Buyers are very diverse in terms of profile – both in terms of age and profession. In Sofia, properties are bought both by people who simply want to move to a larger apartment, and by those who have come from another populated place and want to settle permanently in the capital. This leads to a stable demand for housing.