House prices in Bulgaria returned to double-digit annual growth

House price growth in Bulgaria has again become double-digit on an annual basis in the second quarter, reaching 10.7% after slowing to 9.5% at the beginning of the year. In just one quarter, prices rose by 4.3 per cent compared to just 1.6 per cent in the first three months of this year. This is according to data from the National Statistical Institute (NSI).

The breakdown for the country's six largest cities gives a more mixed picture of price trends. In Sofia, Plovdiv and Varna they have accelerated their growth compared to the first quarter, while in Burgas and Stara Zagora housing has become cheaper. In Ruse, prices are still achieving minimal growth, but it is slowing down compared to the previous quarter.

The leader in terms of quarter-on-quarter price growth is Varna, where they have increased by 7.9% compared to a more modest rise of 2.1% at the beginning of the year. New homes in the seaside capital Varna, which fell by 4.7 per cent in the first three months of the year, are now registering double-digit price growth of 21.1 per cent.

Varna is followed by Plovdiv with a 6.8 per cent rise in one quarter, which is also higher compared to the 3.9 per cent quarterly growth at the beginning of 2023. Here too, new homes, which fell by 1% in the first quarter, are now registering strong growth of 9.2%. In the capital, house prices rose by 4.9 per cent quarter-on-quarter, while in the first quarter they rose by just 0.8 per cent. Prices of new homes in Sofia have risen by 6.8 per cent in one quarter, while at the beginning of the year they were down by 1.1 per cent.

In all three cities, new homes are now appreciating faster than existing homes, while until recently the trend was the opposite. The price growth is taking place against a backdrop of falling property transactions in the second quarter. In Sofia they fell by 11.7 percent, in Plovdiv the decrease was 17.8 percent and in Varna - by 12.4 percent, data from the Registry Agency showed.

At the opposite pole in terms of prices is Burgas, where they decreased by 1.1 percent on a quarterly basis after the 7.3 percent growth in the previous quarter. A drop in prices was recorded for both new and old homes in the city. In Stara Zagora, house prices also decreased on a quarterly basis by 2.2% after a growth of 1.9% in the previous quarter. New homes in the city fell almost 6 percent, while prices of existing homes also declined. In Ruse, prices rose by just 1.3 per cent on a quarter-on-quarter basis, a sharp slowdown from 7.2 per cent the previous quarter.

On a year-on-year basis, all six leading cities in the country reported house price growth, which accelerated in Sofia, Plovdiv and Varna compared to the first quarter of this year, while it slowed down in Burgas, Ruse and Stara Zagora. Varna recorded the strongest annual growth in house prices with 20.3 percent, followed by Plovdiv with 17.6 percent and Burgas with 12.7 percent. The capital is only in fourth place with a price increase of 8.8 percent, but it is still accelerating compared to the first quarter, when it reached 7.2 percent. Sofia is followed by Stara Zagora with a price increase of 7.2 percent, while in Ruse prices have risen by only 2.1 percent year-on-year.

The NSI also published preliminary data on the number of home sales, which includes newly built and existing homes purchased by households. At the national level, they declined by 15.5% y-o-y, with a larger decline recorded in new home sales. At the regional level, the biggest drop in the number of sales was registered in Burgas with 26.5%, followed by Ruse with 22.7% and Stara Zagora with 19.3%. These are also the three cities that reported a quarter-on-quarter decline in prices in the second quarter.

The number of home sales also declined by double digits year-on-year in Plovdiv and Sofia, by 17.3 percent and 14.6 percent respectively, while in Varna the number of homes sold fell by 9.5 percent. In almost all cities, the number of new home sales fell faster than that of existing homes. The only exception is Varna, where new homes sold even increased year-on-year by 6.2 per cent.

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