The Bulgarian property market appears to be cooling off in the major urban centers, with growth slowing and rental prices increasingly seen as disconnected from actual value. Though official figures from the National Statistical Institute for the first quarter are not yet published, preliminary estimates suggest a modest rise in prices - between 5% and 8% - in select large cities, according to Dobromir Ganev of the National Real Estate Association, speaking to BNR.

This moderation in price growth is coupled with a noticeable uptick in transaction volumes across several key city markets. Ganev attributes this partly to regional economic disparities and internal migration trends, which have created price distortions in cities that are absorbing large numbers of people from elsewhere in the country. The gap between property values in large and small cities remains significant, and growing.

Accessibility has taken a sharp hit in Bulgaria’s four biggest cities. Within just half a year, it has worsened by roughly 20%, Ganev said - meaning that the amount of living space a person can purchase with an average salary has shrunk by a fifth. Meanwhile, some smaller cities such as Gabrovo and Silistra are showing positive indicators on this front.

In Sofia, mortgage lending surged by 46% for 2024 so far, and more than 60% of home sales in the capital are now financed with loans. However, many private owners are holding off on selling their properties on the secondary market. While a wave of these homes could return to listings in the short term, Ganev does not foresee this triggering a significant or prolonged decline in overall property prices.

Developers are becoming more cautious. New construction in Sofia dropped sharply - by 60% when comparing the first quarter of this year to the same period in 2024. Ganev notes that the property market remains vast and highly competitive, making any attempt to regulate or steer prices inherently difficult.

The rental segment is also showing signs of imbalance. According to Ganev, many listings are clearly overpriced. While landlords are optimistic, it has become challenging to find well-maintained, reasonably priced rental homes unless they remain available for longer periods. He also emphasized the lack of reliable data on rental transactions, pointing out that rents are largely invisible to national statistical tracking. This data vacuum complicates efforts to understand or manage trends in Bulgaria’s rental housing market.

Source: BNR interview