Real estate investments in Bulgaria: market overview and step-by-step guide for buyers

Bulgaria is becoming an increasingly attractive country for real estate investments. The combination of affordable prices, a growing market and prospects for European integration makes this Balkan country an interesting destination for both living and investing. In this article, we will look at the current situation in the housing market in Bulgaria, analyze trends and provide a step-by-step guide to purchasing real estate in this country.

The current situation in the housing market in Bulgaria

According to the results of the 1st quarter of 2024, the Bulgarian real estate market showed good results. Thus, according to the Registration Agency of the Republic of Bulgaria, 7,298 transactions were registered in the capital of the country, Sofia, in the 1st quarter of 2024. It is important to say here that despite the fact that fewer transactions were registered in the 1st quarter of 2024 than in the 4th quarter of 2023 (then more than 10,000 transactions were registered), there was an annual increase of +14% compared to the 1st quarter of 2023.

A similar situation has developed in other major cities (Plovdiv, Burgas, Varna) with the exception of Stara Zagora, where the number of transactions decreased by 3% year-on-year. In general, the Bulgarian real estate market has shown an excellent start to the beginning of the year.

The price growth trend does not stop. According to the National Statistical Committee of Bulgaria, the housing price index increased in all major cities by the end of 2023. On an annual basis, the price index growth is as follows (change in the 4th quarter of 2023 compared to the 4th quarter of 2022):

In 2024, housing market prices continue to rise, and there are no signs that this trend will change today. High demand is driving up prices in the housing market. High demand, in turn, is formed due to the following factors: wage growth among the population (according to the National Bank of Bulgaria, incomes of the country’s population are growing faster than real estate prices), low loan rates, slowing inflation. Bulgaria’s entry into the Schengen area and the expectation of joining the Euro area also have an impact on price growth.

The most popular apartments among buyers are two-bedroom and three-bedroom apartments. The share of two-room apartments in the market structure is more than 50%, three-room apartments are more than 40%.

According to the largest website in the Bulgarian real estate market imot.bg , the average price for the purchase of a two-room apartment in Sofia in the 2nd quarter of this year is 1,433 EUR/sq.m, which is 7% more than a year ago. In Sofia itself, prices for two-room apartments, depending on the quality of the housing itself and its location, range from 1000 EUR/sq.m to 2500 EUR/sq.m.

Average prices for the purchase of two-bedroom apartments have also increased in other major cities. The dynamics of changes in average prices for two-bedroom apartments in the largest cities of Bulgaria is shown below.

Varna and Burgas became the leaders in price growth — in these two coastal cities, apartment prices increased by 18% over the year. And this is not surprising, since buying a home in developing cities on the Black Sea coast, which also include many cultural attractions and resort areas, looks like an excellent investment not only for permanent residence, but also for investment.

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Average prices for one- and three-bedroom apartments have also increased for the most part. The exceptions were two-room apartments in Plovdiv and Stara Zagora and three-room apartments in Burgas.

Step-by-step procedure for buying real estate in Bulgaria 

What needs to be done before buying: 

1. Open a bank account. 

Everything is clear here — from this account you will be able to pay for the object and cover all additional fees.
Important. Russians without a residence permit are not allowed to open accounts in Bulgaria. However, buyers can transfer funds directly to the account of the seller or the developer from a third country.

2. Select and reserve an object.   

To book an object, you need to pay a deposit, which, as a rule, does not exceed € 3 thousand. The deposit is transferred to the agency’s account on the basis of the booking agreement, is included in the total cost of the object and remains with the agency until the completion of the transaction.

3. Sign a preliminary agreement and draw up a notarial deed.

After making a deposit, it is necessary to conclude a preliminary agreement with the owner within 30 days. This agreement establishes the basic conditions, which are then transferred to the notarial act. Among the specified conditions are the description of the object, price, payment terms, and for unfinished objects — the deadline for completion of construction.

Then, the local notary, in the presence of the buyer and seller, draws up a notarial deed (Title Deed), which is considered a legal document certifying ownership of the property. 

4. Pay for the transaction.

Usually, after signing the notarial act, the buyer immediately transfers the remaining amount to the seller’s account. Additional fees are also paid at this point.

Keep in mind that it is prohibited to make cash payments for any transactions whose value exceeds 10 thousand leva (€5 thousand).

Register the ownership right.

After the transaction is concluded, the notary submits the documents to the district court, where the new data is entered into the state register. Within a week after that, the buyer receives an act from the notary office with a note on the registration of ownership.

It is important for buyers who are legal entities to take into account that a week after receiving the notarial act, they need to register in the system of the Bulgarian National Statistical Institute. Registration of property with the tax inspectorate is carried out automatically upon transfer of ownership. 

Additional expenses when buying a property in Bulgaria

The associated expenses when buying a home in Bulgaria amount to 3-11% of the transaction amount. These are the fees:

• The property transfer tax is 0.1–3%. The exact figure depends on the region where you are buying an apartment. 
• The notary fee depends on the amount of the transaction, usually equal to 0.1–1.5%.
• The registration fee is 0.1%.
• The agent’s commission ranges from 2.5–6%. The share that the buyer must cover will be specified in the contract. 

Buying a home in Bulgaria with a mortgage

Citizens and resident foreigners in Bulgaria are willing to lend, but foreigners without a residence permit are often denied a mortgage by banks. This is especially true for those foreigners who cannot prove a close connection with Bulgaria and do not have income on its territory. The fact is that such borrowers are considered more risky for lenders and may face higher interest rates and large down payments (30-40%).

People who work in Bulgaria or in EU countries and have a confirmed legal income have more opportunities to get a loan. Also, the chances increase for those who receive stable and legal income from other sources, regularly pay taxes, have a positive credit history, and already own real estate in Bulgaria. 

Mortgage interest rates in Bulgaria they range from 6.25 to 14%. It is important to note that interest rates can change over time, so the most up-to-date information should be obtained directly from banks or mortgage brokers.

What can we expect from the housing market in Bulgaria in the future?

The first quarter of 2024 set an excellent start for the Bulgarian housing market — high demand from buyers continued to push prices up. The second quarter has not ended yet, but it can already be assumed that the number of registered transactions will exceed the value of the 1st quarter. 

Prices will continue to rise and it is unlikely that this will be a discovery for anyone. The positive economic situation in the country confirms this: As mentioned earlier, factors such as wage growth among the population, low loan rates, slowing and decreasing inflation (and this is one of the conditions for Bulgaria’s admission to the Euro area) will have a positive impact on price growth.

Bulgaria joined the Schengen area at the end of March, and Bulgaria is expected to join the Euro area in 2025. Already, this creates excellent conditions for attracting investment in real estate from abroad, because prices in Bulgaria are much lower than in other European countries. It is important to note here that this will necessarily affect the price increase.

We can safely say that Bulgaria looks attractive both from the point of view of buying real estate for living and from the point of view of investments.

Overall, 2024 is expected to be another successful year in the Bulgarian housing market.

Frequently Asked Questions

What is the current situation on the real estate market in Bulgaria?

According to the results of the 1st quarter of 2024, the market showed growth. In Sofia, the number of transactions increased by 14% compared to the same period last year. Real estate prices continue to rise in all major cities.

Which cities in Bulgaria show the greatest increase in real estate prices?

Varna and Burgas became the leaders in price growth — in these coastal cities, apartment prices increased by 18% over the year.

Which apartments are most in demand in Bulgaria?

The most popular are two- and three-bedroom apartments. The share of two—room apartments in the market structure is more than 50%, three-room apartments – more than 40%.

What is the average price for a two-room apartment in Sofia?

According to data for the 2nd quarter of 2024, the average price for a two-room apartment in Sofia is 1,433 EUR/sq.m, which is 7% more than a year ago.

What are the main steps when buying a property in Bulgaria?

The main stages include: opening a bank account, selecting and reserving an object, signing a preliminary agreement, drawing up a notarial act, paying for the transaction and registering ownership rights.

What additional costs should be taken into account when buying a property in Bulgaria?

Additional costs amount to 3-11% of the transaction amount and include property transfer tax, notary fee, registration fee and agent’s commission.

Can foreigners get a mortgage in Bulgaria?

For foreigners without a residence permit, banks often refuse mortgages. The chances are higher for those who work in Bulgaria or the EU, have a stable income and a positive credit history.

What are the forecasts for the Bulgarian real estate market in the near future?

Prices are expected to continue to rise. Bulgaria’s entry into the Schengen area and the expected entry into the Euro area in 2025 create attractive conditions for real estate investments.

Author

Yulia Yanukovych Editor-in-Chief

I am responsible for the work of the editorial office. I write expert interviews and guides.

Co-author

Roman Tomashevich Analyst

I show the situation on the real estate market in graphs and figures.

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