According to Dimovsky, the market is gradually shifting from euphoria to reality. The price increase is primarily due to high domestic demand. Bulgarians traditionally prefer to invest in real estate, as well as the rise in the cost of building materials and labor. "It is unrealistic to expect prices to fall from 200,000 euros to 100,000 euros," he stressed.
Banks remain the key factor supporting demand. Mortgage lending in Bulgaria has been relatively cheap in recent years: rates have been kept at 2.2.2%, and the annual interest rate has reached about 2.7% lower than in Germany. According to the investor's estimates, banks influence almost 60% of real estate transactions in Sofia. Any tightening of lending, in his opinion, will cool the market.
Dimovski warned of a possible structural shift: Bulgarian banks are gradually moving away from the model when loans were cheap due to low deposit rates. Instead, mortgage rates will begin to be linked to the Euribor market indicator. This transition is likely between the end of 2026 and the beginning of 2027, although the exact timing is still uncertain.
In addition, inflation expectations have already influenced the behavior of buyers. Concerns about rising prices have led some potential buyers to delay entering the market over the past few months.
Thus, the Bulgarian housing market, according to the expert, is not waiting for a collapse, but a gradual cooling with a possible change in financing conditions, which will require buyers and investors to take a more balanced approach.
Source: Novinite
