BULGARIAN RESIDENTIAL PROPERTY MARKET IN 2020
Author: Polina Stoykova MRICS, MD & Head of Research BULGARIAN PROPERTIES
Тhe property market in Bulgaria entered the Covid-19 pandemic in a very good condition with a continuous upward price movement for 5 years in a row and a strong local demand. This demand was supported by growing household incomes, record-low mortgage interest rates and low unemployment.
The lockdown in Q2 of 2020 put the market on a temporary pause but the activity was resumed immediately after the measures were eased in May 2020. Buyers were rushing to buy homes before a possible second wave in Autumn occurs and the market activity was strong all through the summer and autumn months, compensating for the lower sales volume in the second quarter.
This turned the second half of 2020 into a very successful one for the Bulgarian residential market which was moving with a pace like that before the Covid-19 pandemic. Property prices continued to grow, although a bit more slowly, but this was expected for 2020 even before the challenges it brought.
The demand spread throughout the country directing interest to previously not so much wanted properties like rural houses, as well as vacation apartments in the ski and beach resorts. This was all driven by the need to have your own space for recreation, outdoor activities, and possibility to work from anywhere where you have a place to stay and a good internet connection.
The main driver of the residential market was more than ever the local demand as travel restrictions put the plans of the foreign buyers on hold. Bulgarians too experienced travel restrictions to favorite locations like Greece for summer holidays and this had a positive effect on their demand for summer vacations in Bulgaria which resulted in a higher demand for vacation properties.
Overall, in 2020 the residential property market was less hit by the corona crisis than some other market segments (like offices, retail, and hotels). It even benefited from a growing interest and demand for quality housing space, second homes and spread of the demand throughout the country which will help for a more balanced regional development.
A major role in preserving the market activity and trust was played by the banks which continued lending at even lower interest rates (below 3%). Another factor was the continuing development of the residential projects where the construction did not stop. And the general economic recovery in the second half of the year, preserving the low unemployment (around 5%) and the growing incomes of the households (with about 8-9% annually).