The property market in Bulgaria returns to growth rates

After five years of stagnation in house prices in Bulgaria we have finally reported sharp gains thanks to the decline in interest rates on loans and deposits and a stable economy.
Sofia is a key driver of the recovery, taking into account the double-digit price increases in percentage terms.
For the 12 months to the end of the third quarter of 2016 the index of house prices in Bulgaria recorded growth of 8.8% (9.79% taking into account inflation), which is the strongest increase in the last three months of 2008 onwards. For comparison, a year earlier, prices rose by 2.4%.
For the third quarter of last year, since the last data from the previous three months the increase was 1.59% (1.29% taking the account of inflation in mind).
At the end of September 2016 the prices of new homes rose by nearly 8% on year base (8.6% with inflation) compared to annual growth of 4.9% in the second quarter. Compared with the previous three months it increased by 3.8% (3.3% with inflation).
The record low interest rates on deposits encouraged people to invest in properties, including in housing construction.
The previous housing boom that was in Bulgaria was in the period 2000-2008. House prices in the country increased almost fourfold during this period. But the bubble burst in late 2008 and in 2009 prices recorded the strongest decline during the crisis - 25.7% according to the researches.
In 2010, the decline in prices slowed to just below 5% (8% with inflation) in 2011 accelerated slightly to 5.8% (8.75% taking into account inflation). In 2013 and 2014, the price decline slowed to under 2%, and by 2014 prices returned to growth with an increase of 2.8% (3.65% taking into account inflation).
In 2015, growth accelerated to 4% (4.23% taking into account inflation).
The expectations are that the real estate market in Bulgaria to remain strong through 2017. The demand for real estate in major cities of the country continues to increase, but supply remains limited.
In 2015 Bulgaria's economy expanded by 3%, which is the strongest growth since 2008. For 2017 growth is expected to reach 2.8 percent, according to a forecast by the International Monetary Fund.
The main engine of growth in the property market as a whole is the market in Sofia. The increase in housing prices in the city reached 14.4% at the end of September 2016 yoy. The growth of prices of old housing is ahead of the increase in new - respectively 16.2% and 10.5%.
In Stara Zagora for this period was registered an annual price increase of 9.5%, as their main driver is the increase in the prices of new homes - over 24% yoy.
In Plovdiv the annual growth in property prices generally reaches 8% for this period at 11.6% growth for existing homes and 1.6 percent for new ones. Varna annual increase for the market as a whole was 6% at 6.6% for old and 4.5% for the new construction. In Ruse the annual increase reached 5%, the new and old dwellings rose by almost the same pace. And in Bourgas 4.6 percent- with faster growth in prices for new homes to old - respectively 6.6% and 1.3%.
According to the main agencies Sofia is a leader in sales, followed by Plovdiv, Varna, Burgas and Stara Zagora.