Housing Market Forecast: Expected Price Increase of 5-7% by the End of the Year

Expected Price Growth Amid Low Demand

Housing prices in Bulgaria are likely to see an increase of 5% to 7% by the end of the current year. Although property demand has been observed to be slowing down at the beginning of the year, supply is not increasing fast enough to balance the market, points out Dobromir Ganev, partner at "Comfort & Foros Brokers".

According to the expert, mortgage lending remains active enough to support the market and stimulate price increases, albeit at lower rates compared to previous periods.

Stability Factors and Risks

One of the factors supporting major markets is positive internal migration. Last year, there has been an attraction of the population from smaller towns to Sofia, Plovdiv, Varna, and Burgas, which maintains demand in these regions.

On the other hand, the macroeconomic environment carries significant risks. Geopolitical instability caused by conflicts in Ukraine and Iran affects the global and Bulgarian economies, causing some consumers to postpone purchase decisions. This explains the more noticeable decrease in the volume of completed transactions.

Impact of Policies and the Interest Rate Environment

Bank policies also play an important role. Attention is focused on whether banks will maintain a balanced interest rate policy and whether their resources will be exhausted over the next 18 months, which would lead to an increase in deposit rates and, consequently, mortgage rates.

In the context of fiscal policy, Ganev notes the lack of clear reforms and balancing of budget expenditures for 2026. More serious actions from the government regarding the 2027 budget are expected in the September-October period.

By the end of the year, no fundamental changes are expected in the main market indicators, including the number of registered transactions, new residential units started, total built-up area (TBA), and mortgage lending parameters.