The combination of geopolitical tensions due to the events in Ukraine, the acceleration of inflation, which reached a 24-year high, the tightening of monetary policy by the European Central Bank (ECB) and the expectation of an increase in mortgage rates for the first time in more than a decade - all this has somewhat cooled the Bulgarian real estate market after a year and a half of continuous growth, writes Investor.bg .
A sharp rise in the price of building materials in the spring led to a rise in the cost of construction. This, along with the acceleration of inflation, according to the National Statistical Institute (NSI), pushed the overall housing price index up in the 2nd quarter (a 14-year high was reached). High prices, along with general uncertainty about the economy and income, as well as expectations of higher mortgage rates, forced some buyers to leave the market.
In the 3rd quarter of 2022, the Land Cadastre reported the first decline in real estate transactions since the end of 2020, although for nine months their number in the country was still the highest in 15 years.
Some analysts believe that next year sales will decrease by 5-10%, others say that it will remain at the level of 2022.
Experts also note the continued growth in the volume of supply. According to NSI, in the 3rd quarter, the construction of 8,823 new houses (1 million square meters) began in the country. housing), which is 35% more compared to the same quarter of 2021. This factor, combined with a decrease in demand, will put pressure on real estate prices.
