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Low interest rates on mortgages stimulate demand for housing and their prices are rising.
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Bulgaria returned to the top 30 in the world in terms of price increases
Bulgaria, which for about a year and a half was outside the world top 30 countries in terms of housing price growth, has returned there again and for the last quarter of 2020 is in 29th place in the ranking of Knight Frank.
The annual growth of prices in our country was 4.8%, having increased by 3.2% compared to the third quarter and by 2.1% compared to 6 months ago.
In the third quarter, Bulgaria ranked 38th in this ranking, and before that it was even further behind. Knight Frank data for the last quarter are the first to appear publicly for this period. The NSI will announce the housing price index for the fourth quarter at the end of this week, and Eurostat – a few days later.
Globally, housing prices at the end of 2020 have risen at the fastest pace in nearly three years. They jumped an average of 5.3% year on year, according to Knight Frank. Records are held by New Zealand, Slovakia (16% growth on an annual basis), Russia, Luxembourg (13.6%), Poland (10.9%), USA, Peru (10.3%), Sweden (10, 1%), Austria (10%), Canada and the United Kingdom (9% each).
According to the authors of the ranking, there are two main factors that affect the growth of housing prices at the moment. The leader is the low interest rates on mortgage loans, which stimulate demand. The opposite factor is the constraints associated with the pandemic, especially the fact that many sellers are reluctant to sell their property until they find their next home.
Therefore, it is very likely that when monetary incentives disappear and restrictions remain in the past, the growth of house prices will slow down.
In Europe, the movement is mixed. In Austria, Germany and France, property price growth in the last quarter was 10, 8 and 6%, respectively, but in Italy it was only 1% and in Spain it fell by 2%.
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