April 27, 2023
Bulgaria: Housing Prices in Sofia continue to Rise

Property prices continue to rise, but there are already signs of a slowdown in growth. It is expected to be more pronounced in the second half of the year, since the more significant increase last year was also registered then.

Both investment buyers and those looking for a property to live in are active on the market. The share of purchased three-room apartments - 42%, is already equal to that of two-room apartments, which last year dominated the market with a share of 70%. Property stays on the market continue to be short, with deals often being completed in a matter of days.

This is shown by the data from the beginning of the year of "Bulgarian Properties".

The agency reports that new property listings are up about 10% from the same period in 2022. This is the first increase since 2019, as the first quarter of 2020 was marked by the pandemic and limited business activity, and after that, the available supply began to quickly run out. The properties that went on the market could not satisfy the increased demand and catch up with the pace of realized sales, according to the company's analysis.

The volumes of newly granted housing loans are also increasing. According to BNB data, after the slowdown at the end of 2022, in the first months of 2023, loan volumes increased by about 20% compared to a year earlier and returned to the growth levels characteristic of the past 2 years of high demand and strong housing market. This is one of the most important factors driving the market and its influence remains positive at the moment.

In the meantime, however, on Wednesday the BNB announced measures that will come into force from the summer and aim to cool credit activity.

The expectations for an increase in interest rates on loans are not justified for Bulgaria, the agency notes. Last summer, when the ECB started to raise its key interest rates, the expectation was that this would also affect the cost of loans by early 2023 at the latest.

The increases remained minimal - within 0.06 percentage points for loans in BGN, which are 98% of the granted loans, and this gave confidence to buyers to continue with their plans to buy homes, notes Polina Stoikova, executive director of the agency.

Other macroeconomic factors affecting the housing market continue to have a positive impact - unemployment is below 4% and incomes have continued to grow - by an average of about 17% at the end of 2022, according to NSI data. Thus, incomes, although growing at a slightly slower rate than prices, keep the price-to-income ratio stable, which gives us housing affordability, she points out.

Inflation continues to be a significant driver of real estate investment growth, especially amid continued zero interest rates on deposits and limited safe investment alternatives, the analysis shows.

All this so far leads to a very similar picture to that of last year, but with improved supply and a new market balance achieved. Forecasts for a drop in demand and prices, for a recession and a crisis are not justified so far, notes Stoykova.

Prices continue to rise in Sofia

The average price of homes purchased in the first quarter of 2023 in Sofia, according to the agency's data, is 1,545 euros/sq.m. at 1,345 euros/sq.m. in the first quarter of 2022 and 1,550 euros/sq.m. at the end of 2022. This represents growth of almost 15% on an annual basis and holding levels on a quarterly basis.

Growth on an annual basis in the previous quarters was 22-23%. It can be seen that the current rate of growth is slowing down, but remains significant, Stoykova points out. After adjusting for inflation, real growth remained at just 1.3% on an annual basis, the lowest level since 2020.

According to the expert, prices in Sofia have reached a peak and are driven almost entirely by inflation. Its slowdown contributes to the expected slowdown in house price growth as well. "For the last 3 years, the square meter in the capital has increased in price by nearly 40%", said Polina Stoykova.

The average salary in Sofia reached BGN 2,704 in the last quarter of 2022, so for buying 1 sq.m. residential area in Sofia at the end of last year, about 1.12 average monthly Sofia salaries were needed. For comparison, in 2008 (at the previous peak of the market), 3.4 salaries were needed for the same area, the agency indicates.

The biggest price increases were recorded from the end of 2021 and into 2022, with growth accelerating throughout 2022 and reaching 23% at the end of the year, the agency's data showed.

According to them, the average total price of apartments bought in the first quarter rose to €132,800 against a €115,500 average price in 2022. This in turn shows that market activity has shifted to larger apartments on the back of predominant purchases of two-bedrooms housing last year.

Deals are down, but by not much

Data from the Land Registry for the first quarter, released this week, showed a third consecutive quarterly decline in the number of transactions on an annual basis. For Sofia, the decline was 12.2% in the January-March period, compared to 15.17% in the second half of 2022.

The agency's data show a much smaller drop in sales volumes in Sofia during the first months of the year - below 5%. This is explained by the active market of new construction, in which transactions are registered at a later stage when they are declared.

Preferred neighborhoods and property prices in them

And in 2023, the most preferred neighborhoods in the wide center of Sofia, such as "Banishora" and the Zones, as well as "Malinova Dolina", where the construction of a number of new complexes and buildings of new construction is underway.

The average prices in the most popular neighborhoods in the 1st quarter of 2023, based on actual transactions, are:

• Banishora - 1,470 euros/sq.m.
• The zones - 1,555 euros/sq.m.
• Malinova Dolina - 1,360 euros/sq.m.
• Krastova vada - 1,730 euros/sq.m.

February 28, 2023
Decline in Real Estate Transactions in Bulgaria: Further Price Growth is Not Expected

At the end of last week, a business forum dedicated to the challenges facing the real estate market in Bulgaria was held in Varna. The experts who took part in the event united around the opinion that the past year was successful for the real estate market in Varna. There is a growth in both demand and supply, as well as in new construction, where the growth is about 22%.

For the last two quarters of 2022, however, a decline in the number of transactions is observed in Bulgaria. Maria Parova, who is the manager of one of the largest real estate agencies in our country, said this in an interview with Radio Varna.

"Against the background of the first two quarters, Varna ended the year with positive results and there is even a minimal growth in transactions. What we observe is that buyers make difficult decisions about the purchase of a property, do more inspections and take longer to think things through. Together with the decrease in transactions, this means that the market goes from growing to a plateau. That is, it becomes more balanced," commented Parova.

She does not expect property prices to rise this year.

"If there are no cataclysms, as in the last two years, I expect prices to maintain their current values," commented the expert.

According to Maria Parova, the war in Ukraine and the wave of refugees in Bulgaria have affected the rental market, which until then was at a standstill due to the pandemic. The increase in rental prices is about 30-40%, she also shared.

Since the end of last year and the beginning of this year, there has been a tendency for Ukrainian citizens to purchase property in Bulgaria more and more often. They are looking for all kinds of properties, and the leading factor in their selection is the price and the budget they have.

March 16, 2023
20 landmark buildings across Bulgaria will be lit up in green to honour St Patrick's Day

On St. Patrick's Day, March 17 the Embassy of the Republic of Ireland in Bulgaria will light in green 20 landmark buildings across Bulgaria. There will be also two literary exhibitions dedicated to Irish famous Nobel ‎prize winners writers – James Joyce and Samuel Beckett. Beckett will be ‎presented in Tryavna while Joyce will be presented at Veliko Tarnovo ‎University where there is a faculty of Irish literature.‎

St. Patrick's Day has been officially celebrated in Bulgaria since 2016. The Irish people who reside permanently in Bulgaria number several hundred, as several thousand own houses here.

HE Martina Feeney, Ireland's Ambassador in Sofia, who is also the Irish ‎Ambassador to Armenia and Georgia in a non-resident capacity, talks to BNR's ‎Assia Chaneva about the upcoming holiday, bilateral relations, her special place in Bulgaria, and cultural and historical similarities between the two nations.

This year the holiday is more special. 2023 marks the 50th anniversary of the Republic of Ireland's membership of the European Union, and April marks 74 years since the country was declared a republic, says Ambassador Feeney:

Ireland and Bulgaria are both members of the European Union and there ‎is good cooperation between the two countries, says Ambassador Feeney. Many Irish companies, particularly in the property sector, left Bulgaria ‎after the 2008 crash. However, there are a number of Irish businesses ‎located here now that work mainly in the services sector. There are well-‎established direct air links between Dublin and Sofia and in the summer ‎there are also direct flights to Burgas.‎

Ireland consistently runs a trade surplus with Bulgaria in both goods and ‎services. Irish whiskey and dark beer are particularly popular in the ‎Bulgarian market.‎ Which are the most popular Irish products in Bulgaria now and vice versa - what Bulgarian products can be purchased in Ireland?

"I am delighted that this year 20 buildings across Bulgaria will ‎light up in green for Saint Patrick's Day.‎ Let me just mention a few - here in Sofia, obviously, the ‎embassy building we will light up in green, but also the ‎National Library, Sofia City Library, The Opera and Ballet ‎house, and the Military club will be lit up in green.‎

‎Veliko Tarnovo this year for the first time will light up ‎Tzarevets fortress in green, in Vidin we'll have Baba Vida ‎fortress in green, Tryavna which has a twinning relationship ‎with an Irish town will light up its city clock tower and in ‎Plovdiv, the amphitheatre is going to be lit up in green for the ‎first time.‎

So we hopefully will have photographs and images from all of ‎those buildings and we'll put them up on our website,‎" shares Ambassador Feeney.

About 870 Irish people in Bulgaria hold permanent or long-term residence ‎certificates. Many of these are students at the medical universities and ‎we estimate that a maximum of 500 Irish people live in Bulgaria, says HE Martina Feeney.‎

February 28, 2023
More and more Ukrainians buy homes in Bulgaria

The war in Ukraine and the refugee wave to Bulgaria have had an impact on the housing market, which was previously stagnant due to the pandemic.

Rental prices in the country have increased by around 30-40%. This is what Maria Parova, manager of a large real estate agency, said in an interview with Radio Varna. In the period from the end of 2022 to the beginning of this year, more and more Ukrainian citizens bought property in Bulgaria. The demand is for all kinds of properties, and the leading consideration in their choice is the price and the budget they have.

Overall, however, the country has seen a decline in the number of property transactions in the last two quarters of 2022.

February 13, 2023
A Briton works for the benefit of locals to turn Stoikite in the Rhodope ‎Mountain into a model village

Steven Proctor comes from Newbourne - a small town in the southern part of Great Britain. By profession he is a mechanical engineer, and by residence he is now a resident of the Rhodope Mountains and, more precisely, a resident of the Rhodope village of Stoikite. The 47-year-old Englishman settled here three years ago, together with his Bulgarian wife Vanya.

For Steven, the Rhodopes was love at first sight. Without hesitation, the family sold their ancestral property in Newbourne and bought a beautiful house in Stoikite.

"We escaped the stress in Britain, life here is easier, better," says Stephen. But instead of passively enjoying the beautiful nature and the hospitality of the people of the Rhodope Mountain, Steve, as they call him, rolls up his sleeves and gets to work "for the benefit of the people". The inhabitants of the village are pleasantly surprised by the hard work and generosity of the Briton, for whom volunteering is a way of life.‎

At the end of January, Steve revived the ski lift in the center of Stoikite with his own funds and voluntary work, after the facility had been our of operation for 10 years. Now every resident of the village can ski on the small track for children and beginners completely free of charge, and for tourists the price is symbolic - BGN 5, enough to cover the electricity costs.

"We just got talking in the restaurant one night about there being a lift. Until then, I had no idea that there was a lift there that used to work. So I went and found out who owns the lift and if there was any interest to open it there", says Steve. "There was a lot of interest so we decided to go for it. I did some of the work with another English guy during the summer, the roof and the deck area. We had a local electrician from the village who helped us with all the electrics and power supplies but it was mainly my wife and me. It's mostly for children and learners. As a beginner's slope it's excellent".

For Steve, the small Rhodope village is a piece of paradise. According to him, it has everything you need, the people are friendly, and it is much cheaper than the big ski resorts. The Briton also made a voluntary contribution to the creation of the Bagpipe Museum in the village, and is currently helping to restore the old 19th century school, which will be turned into an art center:

"We have several projects, one of them is to create an art studio, which will open later this year, but we are waiting for the weather to warm up. It is intended both for children from the village and for tourists. In it, they will be engaged in applied arts and crafts. But above all, we want to include the children in Stoikite and the children of our guests," Steven Proctor explains to us.‎

The art studio will be housed in the Stoikite's old 19th school known as the type of “cell school”. Visitors will draw, knit, play the bagpipes, learn about old crafts and customs.

“Steve was involved in the renovation of the building. We want everything inside to be preserved as it looked years ago," says Vanya Proctor and adds that for her family the village of Stoikite is synonymous with peace and freedom.

"We moved to live here and Steve began to actively help the village to be revived," says his wife, adding:‎‎ "In winter, he cleans the streets with a rotary machine (an attachment to a car for clearing snow), which he brought with him from England. Once the excavator has passed down the street, he follows. In the summer time, he sweeps the streets all day with a broom, throws away people's garbage, loads it on our personal van to dispose of it in the necessary places. He goes to help and mow the gardens of elderly people. We have 15-17 chapels around the village and he maintains them and mows around... We wish Stoikite would become a model resort village. This was exactly our idea from the moment we came to live here at the end of 2019. We want this village to be talked about, because it is like a diamond in the middle of the Rhodopes," said Vanya Proctor in conclusion .

February 13, 2023
British Ambassador Rob Dixon: For a very long time, property and assets have been stolen from the Bulgarian people

“For the first time, we are identifying individuals from Europe as being at risk of serious corruption,” British Ambassador to Bulgaria Rob Dixon said in an interview with bTV.

On 10 February, the UK announced sanctions against oligarch and former MP Delyan Peevski, former national security official Ilko Zhelyazkov and oligarch Vasil Bozhkov, living in Dubai. Ambassador Dixon pointed out that the sanctions imposed by the UK were in agreement with their US partners.

“For a very long time, property and assets have been stolen from the Bulgarian people,” Ambassador Dixon said. “The first victims of corruption in Bulgaria are Bulgarian citizens who see their hard-earned assets, funds and resources disappear into the hands of a corrupt minority. Corruption affects the functioning of institutions, public trust and opens the door to interference by hostile states,” Ambassador Dixon added.

February 9, 2023
Buildings constructed post 2000 have the highest earthquake resistance, urbanist says

The horrifying images of collapsed buildings and destroyed infrastructure after the earthquake in Turkey and Syria placed the question about the state of the housing stock in Bulgaria back on the agenda of society.

Many Bulgarians living in multi-storey buildings are worried if their homes can withstand a possible unpredictable natural disaster. The question of the magnitude that buildings in our cities can withstand divided experts into two camps. According to some experts, various omissions and compromises regarding the quality and safety can be found in newer buildings. Urban planner Emil Hristov from the "Sofia Team" association, however, believes that newer buildings pose the smallest risks for our security in the event of a disaster:

"Buildings constructed before 1960 pose the greatest risk, as back then there were still no serious requirements and norms regarding construction and earthquake resistance. A World Bank analysis shows that the collapse of such buildings would lead to 50% of the casualties."

When it comes to the buildings built in the 1970s and later, they are significantly safer from the point of view of the control exercised during their construction and the serious requirements for construction sites:

"Panel buildings built before 1975 have slightly lower requirements, but in general, panel structures are more deformable and can react well to an earthquake. Here comes the question, if the connections between the panels are intact and if the building is well-maintained."

Maintenance is important for any property, movable or immovable, but when it comes to a residential building, the responsibility to ensure that it does not endanger the lives of the occupants lies with the conscience of the owners.

In Sofia and probably in other Bulgarian cities, there is a serious problem related to the available information on the condition of the buildings.

"Neither we, nor anyone else has such data,” Emil Hristov says. “Mapping and finding reliable information is a very difficult process. Our recommendations, which we wrote in both the 2020 World Bank report and the integrated development plan of the Sofia Municipality are that a detailed analysis of the buildings in the city should be initiated. Every building should have a passport, showing its condition, so that a more adequate intervention can be planned if necessary. Even the archives lack data on the older buildings and some of the archives are missing."

According to Hristov, institutions such as the National Construction Control Directorate store such documentation, but only from a certain period and finding such information for buildings built before 1990 is extremely difficult.

The architect tried to dispel fears that the current certification of buildings across the country, in connection with the energy efficiency program, could label some of the homes as uninhabitable.

"Two checks are being carried out, related to the construction and energy efficiency of the building. I have information from companies that deal with such checks. Their conclusions are that in 90% of the cases, the buildings receive a positive assessment with certain remarks. Negative evaluations from the point of view of seismic risk are given to some buildings constructed before the 1960s. I rule out the possibility that the number of buildings in need of serious reconstruction after such an assessment will be too big.”

A decision on whether and how to assist owners who have received an order to improve the structural sustainability of their building is still being sought.