A "mini-city within the city" — the direction in which the construction market around Sofia is moving

Anyone who can afford it would rather buy a house.”

This is what Polina Stoykova, CEO of the real estate company Bulgarian Properties, told Economic.bg. According to her, there was a growing interest in buying houses as early as 2008, but the boom in this direction came in 2021 — a year after the beginning of the blockades due to COVID-19. That's when many people decided to invest in a bigger house and move closer to nature.

It was in the period 2019 - 2021 that many gated community projects were launched in Bulgaria, especially in Sofia — where the residential complex is close to the city, but at the same time has everything (shops, restaurants, in some cases even a school and kindergarten) and people who work from home do not need to leave the community.

Gated community type design

An example of one of the newest and largest projects in this area is "Residential Park Lozen" — a gated residential complex located in the village of Lozen. The construction of the first phase of the complex started in the summer of 2019 and the investor is the German company Linder. In the first stage, the investor invested BGN 80 million in the construction of 136 detached, semi-detached and terraced houses, a public area with a school, a kindergarten, an office building with shops and a sports hall.

The project is expected to be completed in 2024, with a total investment of BGN 300 million, and the complex will occupy an area of more than 230 acres.

We are recreating the concept of the 'city within the city', the 'office within the park'. This comes at a good time when the working environment is changing. These offices are becoming more like social centres," Georgi Ranchev, manager of Lozen Tech Park, recently told journalists.

In fact, construction of the Lozen Tech Park has already begun next to the residential complex. The first phase of the project includes two buildings with office and retail space, including a shop, restaurant, canteen and cafes, as well as underground parking and extensive green areas. A close and convenient connection to the ring road will be built to ensure quick access to the city.

"In addition, we already have agreements with UNWE, UASG and the Technical University. Initiatives are underway to create an environment for training and seminars," says Ranchev.

What are the trends?

Is there a new trend in the construction of such complexes in Bulgaria? We asked representatives of the real estate company Imoteka for Sofia and Plovdiv to answer this question.

From their observations it is clear that this is probably the direction in which construction will develop, but for the moment investors are cautious. On the territory of Sofia, according to the experts, there is potential for such projects in the area around Elin Pelin.

"There is no potential for the construction of large residential complexes in the immediate vicinity of Sofia, but in the direction of Elin Pelin and north of the ring road there are a number of large plots of land that would allow this. I do not think that in the current situation and in the coming months investors will decide to make such a move," says Georgi Peychev of Imoteka, which monitors the capital's market.

Around Plovdiv, however, there is definitely no investor interest in gated community construction for the time being.

The city centre is close to the surrounding villages. This means that buyers of houses in the surrounding villages have both the convenience of the big city and the tranquillity of living in the countryside," says Marietta Gargova.

A driving force in the market

At the moment, the market around Sofia is mainly driven by houses located 20 - 30 km from the southern or northern ring roads. Customers are mostly young families looking for detached houses with 3-4 bedrooms and large enough yards. There is also a market for terraced houses, but these are currently only preferred if they have a large enough private garden and are well maintained. Prices range from 350,000 to 600,000 euros. However, detached houses are more in demand at the moment.

"In both cases, what is important for clients is good access to the capital, so that they can easily drive to their children's schools and work. The preferred areas are German, Bistritsa, but also Gurmazovo, Ivanyane, Marble, Kokalyane," says Peychev.

The interest in Plovdiv is more focused on detached houses. There are still terraced houses for sale in gated complexes, but they are more difficult to sell.

"Clients prefer detached houses with their own gardens. They are usually looking for at least 3 bedrooms, but more often 4. There is a lot of interest in the villages around Plovdiv," says Marietta Gargova.

The housing market

The market is active at the moment, with low interest rates stimulating demand. Good properties sell quickly and easily, while lower quality properties sell more slowly. In the coming months, prices and transaction activity are expected to remain stable.

This is how the two experts described the current state of the Bulgarian property market.

Despite the claims of all the analysts of the real estate market in Bulgaria that the sector is developing more than well and that people are continuing to buy houses, statistics show that real estate is becoming more and more unaffordable for people. At the same time, the construction of new cooperatives continues, and the number of uninhabited properties is also high.