Housing prices in Bulgaria- the highest growth speed in the EU. 7 out of 10 transactions are made with cash payment

Bulgaria has registered the strongest increase in EU housing prices for another consecutive quarter. According to Eurostat data, property prices in Bulgaria increased in the fourth quarter of 2024 with a record percentage of 18.3% per year, writes the local press.

In the previous quarter, the growth reached 16.5% compared to the same period by one year, which again placed it in the first place in the EU. In the second and first trimester, the annual growth was 15.1% and 16%, only Poland was departing Bulgaria regarding the increase of housing prices. For comparison, housing prices in the EU increased by an average of 4.9% in the fourth quarter, and in the euro area the increase was 4.2%.

In this context, the mortgage loans continue to grow at a vertigo pace. Loans for homes granted to households by commercial banks in Bulgaria increased by 29% per year, reaching 26.473 billion Leva at the end of February 2025, according to the data of the National Bank of Bulgaria. Last month, the growth was also significant – 29.3%, which shows that so far the measures of the Central Bank for limiting the mortgage lending do not give visible results.

Mortgage loans are actually declining in number, even if they are growing in absolute terms

However, experts point out that mortgage loans are actually decreasing in number, even if they are growing in absolute terms. “The lending is increasing because the average size of a mortgage increases due to the higher prices for homes,” explained Desislava Nikolova from the “My Money” platform.

According to brokers' observations, from the beginning of this year, the average price per square meter has increased by 6%. They recall that, despite the increase of lending, almost 70% of the real estate transactions in Bulgaria are completed with cash payment.

“However, on the main markets in the big cities, the share of transactions with mortgage loans is much higher,” stresses the credit consultant Tihomir Toșev. In Sofia, for example, 59% of transactions are carried out with a mortgage. At Varna – 44%, at Burgas – 40%, and in Plovdiv – 38%. The data is from the register agency, for the first quarter of this year.

In smaller localities, properties are not so expensive and funds can be provided with consumption loans

“It is possible that for the whole country, about 70% of the transactions will not be with mortgage, but that does not mean that they are not financed with consumer credit. In the smaller localities, the properties are not so expensive and the funds can be provided with consumer loans. The register agency offers information only about the transactions concluded with mortgage loans, but not with consumer credits.”

However, he does not deny that many Bulgarians have good savings that would allow them to buy a home without a loan, even in Sofia for almost 200,000 euros. “Many people from smaller localities in Bulgaria want a home in the Capital. At the same time, many residents of Sofia buy a home as an investment. But to invest in a home in Sofia at these price levels,” the expert believes. He stressed that prices per square meter in Sofia vary from 2,000 euros to 8,000 euros in areas in the city center.

“This year I do not expect significant changes on the market, but for 2026 I think there will be a price maintaining and a decrease in the number of transactions if the euro is introduced-at least because we have to get used to the new currency, for people to see their new income and expenses,” commented to the post.

Regarding interest on mortgage loans, the expert does not expect an increase this year. He pointed out that Euribor, which is a basic interest for many banks, is maintained at the Bulgarian level and is even expected to decrease. Other banks use medium interest interest in deposits, which remain near zero. However, he advises those who are going to make a mortgage loan not to allow the monthly rate to exceed 30% of the income, even if the Bulgarian National Bank has set a 50% ceiling (material made with Rador Radio Romania support)