Transactions in Bulgaria have been increasing over the past two years

The pandemic disrupted the global real estate market. The "lockdown" for home purchases during the COVID outbreak dampened demand, consequently affecting prices in major markets like the USA. In 2020, EU-wide there was an overall decline in property transactions due to lockdown measures during the COVID pandemic. Only four housing markets (Denmark, Finland, the Netherlands, and Austria) registered an increase in sales.

In 2021, almost all property markets in the European Union reported a surge in property transactions. The largest increase was seen in Spain (+39.3%), followed by Bulgaria (+39%). These figures are according to data from the European statistical service Eurostat. Only the Netherlands and Luxembourg recorded a decrease in transactions. The market was so hot in 2021 that 11 out of 16 countries with available data showed annual growth rates above 10%.

In the past year (2022), the number of property transactions has decreased, compared to 2021, in most of the 16 EU countries with available data. However, there are exceptions, and Bulgaria is one of them.

The largest drop in property transactions in 2022 was recorded in Denmark, where purchases fell by 31.6%. Finland followed with a 16.6% decline, followed by the Netherlands (16.2% decrease in transactions) and Luxembourg (15.1%).

According to a recent report by Colliers on the rental housing market in Central and Eastern Europe (CEE), at the beginning of 2023, there has been a significant increase in the supply of rental properties on an annual basis, compared to the end of 2021 and 2022. This trend is particularly noticeable in the countries of Central and Eastern Europe. The growth rate in our country is 173%. In other countries, it is even more pronounced, such as Hungary, with a rate of 301%, Romania (244%), and Poland (217%).

The primary driver of the increase in rental property supply is the shortfall in availability. As the middle class expands in CEE countries, more people can afford to rent apartments. It remains to be seen if 2023 will be a year of further growth in rentals.