Global Market Guide: Sofia, Bulgaria
Sofia, the capital and largest city in Bulgaria, is considered one of Europe’s most affordable cities. With a shortage of new construction for its growing community of millennial buyers, the city is currently facing some challenges in the luxury real estate market. In this month’s Global Market Guide, we take an inside look at the current state and the predicted future of the luxury real estate market in Sofia, Bulgaria.
About 30% of listings in Bulgaria are exclusive, but the goal is to have exclusivity in most of the market. Almost 90% of the offers that we have are our deals. Representation is also given to buyers looking to purchase luxury homes in Sofia and our company works with a very high-end clientele, who often do not have time to worry about every detail of the buying process, so we step in and assist them as much as needed.
CURRENT HOUSING MARKET
Last year was a very dynamic time in the luxury housing market. There was an influx of demand for listings, but unfortunately not a great supply for what buyers are looking for. The new generation of wealthy buyers are seeking contemporary spaces with smart home capabilities and large yards, and unfortunately there are not many of these listings on the market. However, when these listings do become available, the sell very quickly due to high demand.
ATTRACTING LUXURY BUYERS
Buyers in Sofia are attracted to the location, but they are also very particular about the quality and structure of buildings they purchase. They are looking for new and contemporary buildings with sustainable features and smart home technology to fit their modern needs.
Most buyers will choose to live in an older building if it is in a prime location, such as the center of the city, however, newer buildings are preferred. Many of the new buildings are very expensive and there are few of them in the prime locations that many buyers in the area are looking to live. It is predicted that more of the new developments that buyers are looking for will be completed within the next three years.
LUXURY BUYER PROFILE
Luxury buyers in Sofia are mostly Bulgarians who are returning from abroad to purchase a home to reside in or a property for an investment. After securing wealth in the United States or Europe, they are beginning to come back to Bulgaria with their new-found wealth. We are also seeing Bulgarians from the countryside venture into the city to purchase homes.
CURRENT POLITICAL CLIMATE
The political climate and business market has been quite stable. Five years ago, the country implemented a flat tax for businesses which helped local companies and drew interest from foreign investors, which has helped stabilize the economy.
GROWTH IN THE MARKET
Our member predicts that the next five years will be promising for the Bulgarian luxury market, but it may not see rapid growth as it did 10-12 years ago. The next two years will show growth with 6%-10% increase in prices with new construction projects completed in Sofia in three years. These new projects are expected to stabilize the market, however there are many people coming into the city, so the future remains uncertain.
In recent years Sofia, Bulgaria has become a tourist destination. How have you seen this affect luxury sales in your market?
Residents in Sophia see that there is an influx of tourists entering the city and they have begun purchasing homes in locations where tourists would like to reside during their stay. On Vitosha Boulevard (which is comparable to 5th avenue in New York City), locals are buying properties and marketing them as short-term rentals on sites like Airbnb.
With highly requested new construction on the horizon and Bulgarians returning to the area to invest in real estate, the market in Bulgaria looks promising. The country recently had price growth of over 9% among luxury listings which proves that the market is flourishing as it awaits completion of new developments.
Special thanks to our member Unique Estates for providing their insights about the luxury market in Sofia, Bulgaria.
For more information about properties in Sofia, browse here.