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Changes in demand on the Bulgarian property market. The panels are replaced with houses and brick apartments

Since the beginning of 2017, there has been a new boom in house purchase lending, which is nearly five times or 448% more than in the same period in 2016. 26% is growing demand for loans for the purchase of apartments in brick buildings, while for panels that are no longer in vogue, demand remains unchanged.

There is no change in the average term of the requested home loans, which is 22 years, according to an analysis by Postbank. By contrast, the average loan amount increased by 14%
and by September 2017 it reached 51,000 euros. The larger demand for funding is mainly due to rising property sales prices in 2017. When applying for a loan, the leading proportion of men, which is 63% compared to 37% of women, remains. As for the age of applicants, there is a slight difference between men on average 38 years and women - on average 40 years. This ratio has remained unchanged from 2016.

Total mortgage lending grew by 58% in the first nine months of the year compared to the same period in 2016. Mortgage business is developing most rapidly in the big cities Sofia, Varna, Bourgas, Plovdiv and Stara Zagora, where the increase is two-digit, while in Blagoevgrad , Dobrich and Veliko Tarnovo growth is over 100%.

Data show that since the beginning of the year, interest in housing lending has grown thanks to positive economic indicators such as GDP growth, average wage growth and falling unemployment. In 2017, more active construction of residential areas was also reported. According to data of the National Statistical Institute for the second quarter of 2017, compared to the second quarter of 2016, the issued permits for construction of new residential buildings increased by 35.4%.

The newly built residential buildings increased by 53%. Selling property prices are also rising in big cities. Real estate agencies report that the average market price in Sofia already exceeds 1,000 euros per square meter.

On the other hand, housing finance is becoming more and more advantageous. According to BNB data for August 2017, the average interest rate on new loans for home loans decreased by 0.95 percentage points compared to August 2016 and reached 3.90%. The record low interest rates and favorable economic indicators have a positive effect on the demand for housing loans, experts say on housing finance.