The real estate market in Sofia is continuing to show strong growth, with sales seeing a 10% increase compared to the previous year.
This positive trend is attributed to several factors, including rising wages, low mortgage interest rates, and an increasing demand for completed, move-in-ready properties.
Momchil Krastev, a broker at one of Sofia’s leading real estate agencies, shared these insights in a recent interview with Radio Sofia.
He emphasized that the market’s strong performance is largely driven by the scarcity of available properties, particularly in the new construction sector, and the growing preference for newly built homes.
High Demand for Completed Properties
Krastev noted that there is a clear shift in buyer behavior, with a growing demand for properties that are ready for immediate occupancy.
This is evident in both the newly constructed segment and the secondary market, where buyers are keen to find properties that are completed and can be moved into without delay.
However, he pointed out that the supply of such homes is becoming increasingly scarce, creating more competition among buyers.
In addition to the limited availability of completed properties, the broker attributed the market’s activity to favorable economic conditions.
Low mortgage interest rates, rising living standards, and higher average wages are all contributing factors that are keeping demand high.
New Construction vs. Secondary Market
Despite a significant number of building permits being issued annually, Krastev observed that the actual number of construction starts is considerably lower, creating a supply gap.
Recent data from 2023 and early 2024 revealed around 30,000 property transactions in Sofia, but new construction accounted for only a small portion of these deals.
The mismatch between the number of permits and actual construction has exacerbated the shortage of available homes, pushing up prices and intensifying competition for properties.
Shift in Buyer Preferences
One notable trend in Sofia’s real estate market is the increasing preference for newer properties over older homes.
Krastev remarked that buyers are willing to pay above average market prices for newly built homes, reflecting a shift towards modern, energy-efficient properties.
These homes often come with higher price tags, but the demand for them remains strong, especially among those seeking long-term value.
Renting vs. Buying
Krastev also discussed the dilemma that many prospective buyers face: whether to rent or purchase a property.
According to him, renting can be a more advantageous option in the short term, particularly for individuals with a dynamic lifestyle who are not looking to commit to a long-term investment. Renting provides flexibility without the burden of large initial payments.
On the other hand, buying a property is more cost-effective in the long run, especially as monthly mortgage payments gradually pay off the property’s value. For those planning to settle down and build equity, purchasing a home remains a financially sound choice.
Land vs. Completed Property
When it comes to investing in real estate, Krastev highlighted the choice between buying land on the outskirts of Sofia to build a house or purchasing a completed property within the city.
The latter, such as a ground-floor apartment with a yard, might come at a similar price to a plot of land, but the advantages of a ready-to-move-in home can outweigh the initial cost savings of a land investment.
Outlook for 2025
Looking ahead, Krastev noted that the upcoming adoption of the euro in Bulgaria could have an impact on real estate prices.
While the change may create economic uncertainties, it could also provide further opportunities for growth in Sofia’s real estate market.
As the capital continues to attract both local and international buyers, the demand for quality housing is expected to remain strong throughout 2025.
In summary, Sofia’s real estate market remains buoyant, fueled by high demand, low supply, and favorable economic conditions.
As the city continues to evolve, experts like Krastev foresee a dynamic market driven by modern buyer preferences and ongoing economic developments.