The High Cost of Newly Built Homes in Bulgaria: Reasons and Solutions

You will be hard pressed to find a home to buy under construction. The majority of newly built residential buildings are sold out during the construction phase. Prices vary from 1,600 EUR/sq.m in the metropolitan district of Lyulin to 5,000 EUR/sq.m in the East, commented the National Association of Construction Entrepreneurs (NASP).

The reason for the high prices is the increase in the price of construction materials, inflation and, last but not least, the higher prices of plots earmarked for residential construction, the deficit of which is quite large. “We have one given at the moment – a global trend is for territories with built infrastructure that costs billions, these are the refineries (Hadji Dimitar, Druzhba, Lozenets) to be turned into residential areas. These areas should be improved by the municipality, regulated and new construction should be implemented there. The other areas that have potential for development are the existing residential complexes. There, the built-up ratio can reach 3. At the moment it is 1.4”, says Georgi Shopov, chairman of NASP.

Regarding the development of the refineries, the ball is in the hands of the municipalities. It is necessary to change the PMO. as well as administrative will and resources at the municipal and state level. There is extraordinary potential in quite a few outdated and decommissioned railway lines and unimproved, desolate areas in various neighborhoods. They could become green and comfortable areas for living, is the opinion of NASP.

The opinion that Sofia has been rebuilt is not true. “Sofia’s problem is not in the reconstruction, but in the cars on the sidewalks and the dirty air, in the lack of kindergartens and schools, as well as in the lack of good infrastructure. The capital could develop to the north in the direction of the southern slopes of Stara Planina, but this is an extremely expensive undertaking and is currently beyond the financial capabilities of the municipality. The requirements for Sofia are high and it is constantly compared to cities like Copenhagen, for example. But there the taxes are incomparably higher”, commented Dimitar Dimitrov from NASP.

Still, the prices of newly built homes remain high, mostly because of the significant increase in the price of building materials. “For the last year, the total value of materials has increased by more than 30%. Rebar has doubled over the period, while wood has risen in price by 100% and bricks by 50%. The cost of one square meter of housing is currently around 820 EUR/sq.m, but without the land, which is about 50% of the cost. The final price also includes numerous administrative town planning procedures, which take between 3 and 5 years. The final sales prices in the capital are within very wide limits, but it should be borne in mind that in Europe one square meter costs no less than 5,000 euros, and that for a quality that is usually lower than what Sofia can can be bought for 2,000 euros, for example”, explains Emilia Tsokonova from NASP.

According to the representatives of NASP, demand will sustainably continue to outstrip supply and there will be no drop in prices. At the same time, buyer interest remains high as investing in housing is a safe step. Therefore, improvements and facilitation in the quality and speed of production of housing products is a priority for the capabilities and needs of consumers.

You can see detailed statistics on the average property prices in Bulgaria by cities and districts HERE

Prices of basic building materials