Experts believe that Bulgaria’s entry into the Eurozone will slow down the local housing market

Bulgaria's upcoming entry into the Eurozone will cause a slight slowdown in the country’s housing market, but with time the dynamism will return once again. This was the opinion expressed by Petar Sotirov, the commercial director of the construction and investment company VM Invest, who took part in the "Personal Finances" forum, held on Wednesday in Sofia.

All buyers are currently interested in the Eurozone. There will be an adjustment period because there is a lack of information, but after a while the dynamics of the market will return," he said during the discussions on the "Credits and Properties" panel.

Sotirov is also of the view that Bulgarians continue to see investment in real estate as one of the safest financial decisions, but still, over the years, people's interests in properties have changed. If until two or three years ago, two-bedroom apartments were mainly sought after to rent out as an investment, nowadays the most in-demand are apartments with more than two bedrooms, as well as those located on the ground floors.

This has led to a lack of such properties, as buyers previously focused on smaller properties, and now we are seeing a shortage of large homes on the market," says Petar Sotirov.

According to him, the most active buyers at the moment are people between 35 and 40 years of age, working in the IT sector, and who have already started a family.

The new balance

According to Miroslav Vladimirov, who is a member of the Board of Directors of the real estate company ERA, the housing market in Bulgaria has found a new balance in 2023. The main factors driving it, according to him, at the moment are the increased wealth of households (in terms of wage growth) and the need for housing.

Households in Bulgaria as a whole have never been richer. Although we occupy the last place in the EU, people are getting wealthier and are buying houses for their own needs. COVID has boosted all the markets, but that boom has slowly started to die down. 2023 was the year when the market found its new equilibrium," says Vladimirov.

Georgi Georgiev, director of Investbank's Branch Network Sales and Coordination Department, also took part in the discussion. His observation of the market is that it is developing extremely dynamically and mortgage loans in the six major cities of the country are permanently increasing.

There are reports of growth in lending, and this is due to favorable conditions," he says.

Georgiev's forecasts are that interest rates on loans will not increase by more than 0.5 percentage points during the year, which will not have a serious impact on the market.

According to him, Bulgaria's entry into the Eurozone will increase the interest in buying a home on the part of foreign buyers. Even now, there are already foreigners who apply for mortgage loans in Bulgaria to buy a property here, but they "rely more on self-financing and the loan share granted is much lower."

Georgiev reassures that when Bulgaria becomes part of the Eurozone, there will no increase in interest rates is expected on the already issued mortgage loans.

Translated by Tzvetozar Vincent Iolov