Episode 88 - Real Estate Market Forecast to 2025

Major changes are expected in the real estate market in Bulgaria in 2025. Restrictions introduced by the European Commission and new legislative measures will cause a significant revision of the strategy of buyers and sellers, which creates a great danger that properties will become totally unaffordable for consumers.

Main trends

1. Price changes

The average price of transactions in Sofia has risen from 1550 EUR/m² to 1850 EUR/m², which underlines the brightening of the market and the settlement of transactions at their real values. This is expected to continue as a trend in 2025, now also in other cities, which will increase the cost of notarisation of transactions.

2. New VAT registration requirements for individuals

A legislative change will require the charging of VAT on sales of new property and by individuals within 5 years of acquisition - whether by purchase, compensation or otherwise. This would:

• Reduce the affordability of properties.
• Refuse speculative sellers.
• Increase the final price for buyers.

3. Market dynamics

The decrease in liquidity will make quick and speculative sales more difficult. This will discourage many sellers from selling their properties and take many properties off the market, which will further reduce availability and may lead to further increases in property prices due to their scarcity.

Brokerage sector under pressure

Serious challenges await brokers:

• A decline in trust in their services.
• Increase direct transactions through social networks.
• Difficulties in adapting to new market conditions.

What does this mean for you?

1. Buyers: if you are looking at a property for speculation, you need to consider costs carefully, including new taxes. For residential purposes, keep an eye on the market and be patient.
2. Sellers: be prepared for possible drops in demand and try to optimize your supply.
3. Investors: look for long-term opportunities instead of short-term speculation.

Conclusion

2025 will be a testing year for all market participants. While restrictions may limit speculation, they will also impose new standards and make the market more transparent.

Monitor trends and adapt your strategies to new conditions. Good luck!