With seven years of average salaries in Bulgaria, we can buy a two-room apartment in Sofia. This is shown by calculations of “Telegraph” based on average property prices and average salaries in our country and in three other countries where many of our compatriots work.
According to data from the National Statistical Institute at the end of the first quarter in our country, the average salary is BGN 2,300 or BGN 27,600 per year. The average price per square meter for an apartment in Sofia is 1,650 euros, and for 60 square meters or a two-room apartment you will pay 100,000 euros or BGN 193,050. Thus, to buy an apartment in Sofia, you have to work for 7 years just for itwithout incurring any other costs. For comparison, the repayment period for the same home, but if you are abroad in Germany, is three times shorter, or 2.2 years.
Sofia is in 101st place in terms of housing prices in Europe
Prices
According to data from real estate agencies, the average price of apartments in Varna is 1,343 euros, and in Plovdiv – 1,200 euros per square meter. Thus, depending on the city, you will pay between 140,000 and 193,050 BGN for a two-room apartment with an area of about 60 square meters. In case you rely on a Bulgarian salary, for a property in Varna, you must work for 5.7 years, and in Plovdiv – 5 years. With the average salary in Germany, you will get a home in the maritime capital in just 1.8 years, and in Plovdiv you will collect the money in a year and a half.
Property can be bought relatively quickly from Bulgarians working in Great Britain. There, the average salary is 3,000 British pounds, say local people who work on the island. Thus, it will take 2.3 years for a two-room apartment in Sofia, and 1.9 years in the maritime capital. In one year and seven months, the amount for a two-room apartment in Plovdiv will be worked out.
Spain
In Spain, the average annual salary is 27,000 euros or 52,650 BGN, which is significantly less than incomes in Germany and Great Britain. However, even the Bulgarians working there will be able to buy a house in our country much faster than if they work in their own country. For Bulgarians working in Spain, properties in our country are much more affordable. For example, it takes 3.7 years for a house in Sofia, 3 years for Varna, and 2.7 years for Plovdiv.
Around the world
A report by an international accounting firm provides data on the affordability of properties in other countries. According to him, the most affordable countries to buy a new home are Norway and Denmark, where citizens need the equivalent of less than five gross annual salaries to buy their own home. Norwegian citizens should save 4.8 gross annual salaries. The most affordable country to buy a new home is Denmark, where homes cost just the equivalent of 4.7 gross annual wages.
A buyer in Amsterdam needs to save 15.1 average gross annual wages, to afford housing at an average price. People in Bratislava, Dublin, Belgrade, Budapest, Ljubljana, Copenhagen, Warsaw, London (domestic) and Zagreb will need to save the equivalent of 8 to 13 gross average annual salaries to afford a new apartment.
We take out a mortgage for 30 years, we return it on the tenth
Bulgarians en masse take out mortgages for property purchases, agreeing a repayment period of 25-30 years, but already at the tenth or twelfth year they return it. This was commented by Tihomir Toshev from Credit Center. The main reason for negotiating the longer term at the beginning is that the monthly installment is smaller, but then they manage to pay off the balance much faster, explained Toshev. He pointed out that the mortgages are 10 years old and if the loan is not repaid, the mortgage is extended before a notary public. Toshev calculated that if the balance of the loan, for example, is BGN 100,000, the consumer must pay BGN 750 to the notary as a mortgage renewal fee.
Toshev also commented that there is no cooling off in the demand for home loansas this year is expected to be a record and to reach BGN 7 billion of new mortgage loans taken out within 2024.
BNB with a cap on the repayment period for housing loans
The maximum term under the loan agreement must not be longer than 30 years. This is foreseen by new requirements, which were adopted at a regular meeting of the Management Board of the Bulgarian National Bank. The requirements apply to the granting and renegotiation of loans secured by residential real estate and cover the “Households” sector. It is also envisaged that the ratio between the amount of the loan and the value of the collateral at the time of granting shall be no higher than 85%.
The ratio between the amount of current payments in connection with debt service and the borrower’s monthly income upon granting should not be higher than 50%.
Requirements enter effective from 1 October 2024as the banks and branches of foreign banks should bring their activities on granting and renegotiating credits in accordance with the established deadline.
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