Property Prices in Sofia Bulgaria
The cost of purchasing residential property in Sofia rose by 48.6% in the last four years according to data from the National Statistical Institute. This puts the capital in first place among the major cities in Bulgaria for both the cost and the percentage increase in home purchasing costs. This article is a guide to Real Estate Prices in Sofia Bulgaria in 2020.
After four years of property price rises, Bulgaria’s housing market remains strong, buoyed by low interest rates and a stable, growing economy.
The supply of housing in Sofia is now again on the rise and 20% of purchases are made for investment purposes.
Residential estate investments provide 4-5% yield rate on average. However, studio apartments can reach a 7.5% return.
Transaction costs in Bulgaria are evenly split between buyer and seller unlike most of Europe where the seller bears the costs.
Real Estate Prices in Sofia Bulgaria
The majority of buyers (41%) in purchased two-bedroom apartments in Sofia.
In 2019, the average residential sales price in Sofia ranged from €145,000 to €180,000 for two-bedroom apartments and from €210,000 to €250,000 for three-bedroom apartments. Prices of houses started at €450,000.
Lozenets and the city centre have highest property prices in the Sofia, ranging from €1,500 to €2,300 per sq. m. Strelbishte and Gotse Delchev are also popular neighbourhoods with property prices between €1,100 and €1,400 per sq. m.
Sofia’s southern districts are currently experiencing a lot of interest as people are looking for more space, less traffic, less pollution and a higher standard of living.
The Krastova Vada, Hladilnika and Vitosha districts, particularly along Cherni Vrah Boulevard and around the Paradise Center shopping mall, are immensely popular because of facilities, infrastructure, proximity to Vitosha mountain and the Metro station. The average residential property price in Kraskova Vada currently stand at about €1,200 per sq. m. Modern gated developments with swimming pool, GYM, kindergarten etc. the price per sq. m. could go up to €2,200 per sq. m¡
Another district in demand is Studentski Grad because of the availability of newly built homes at affordable prices and a high return on investmen as the apartments are easy to rent because of the large students.
Sofia municipality is developing a strategy residential property development in the north of Sofia.
Currently, most of the buyers live in Bulgaria but there is noticeable interest from Bulgarians living abroad.
The exceptionally low interest rates on bank deposits and cheap mortgages have encouraged people to invest in real estate especially of pre-construction residential property.
Office and Retail Space in Sofia
Sofia is the largest market for modern office and retail spaces in Bulgaria. The volume of the industrial and logistic spaces is growing in line with the overall economic growth of the city.
The cost of office space in Sofia Office is the lowest in the EU.
Property Rental Prices Sofia Yields
Property rental yields in the Sofia centre were around 6% before the impact of the Coronavirus
The most sought-after areas are Doctor’s Garden, Ivan Vazov, Iztok and Lozenets as they have many parks and green spaces, making them popular with expats including those working at the many foreign Embassies.
Located in the southern part of Sofia in the foothills of Vitosha Mountain are the prestigious suburban neighbourhoods of Boyana, Simeonovo and Dragalevtsi. These districts are very popular with families due to the good schools in the area.
Impact on Covid-19 on Property Price in Sofia
Due to the rise of new housing permits issued and the number of the completed projects there now is a lot of stock on the market and many developers are offering savings on Real Estate Prices in Sofia Bulgaria. Some of the discounts can be as much as 20% if a large deposit payment is made up front.
There has been a noticeable increase in the quality of the construction, such as energy efficiency, and additional extras offers, such as fitness areas, swimming pools and childcare facilities. These are the type of properties that will attract a premium going forward.
Growing Bulgarian Economy
In Bulgaria, the economy is growing, and people are moving to Sofia from Bulgaria and abroad.
The continued expansion of the Metro in Sofia is making the suburbs more attractive to buyers as the prices are lower than the city centre and work can be reached in 20 minutes.
A further attraction of living outside the centre of Sofia is availability of parking areas so you do not have to worry where you will leave your car. In the centre of Sofia, you will have a problem finding a parking space if you do not have a garage or sticker for the green/blue zone.
Large European companies are extremely interested in Sofia as a place for investment as Bulgaria is known as the Silicon Valley of South eastern Europe. The software business in Bulgaria is the best performing sector in the ICT industry.
Factors that attracts so many companies to do business in Bulgaria are
- Low corporate tax rates of 10 percent
- High quality staff at relatively low costs
- Fast Internet speed
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