Danes now dominate private rented sector
Rising housing prices driven by economic growth and loose monetary policies have made homeownership more difficult for the current generation compared to previous ones, according to a 2023 analysis by CMS and CBRE. As GDP rises, homeownership rates tend to decline, while the number of renters increases, suggesting that the Private Rented Sector (PRS) will become a significant asset class in CEE, including Bulgaria.
In Sofia, Cleves, a pioneer in PRS, exited the market last year, selling off its portfolio of 150 luxury apartments. Meanwhile, local developer BLD entered the build-to-rent segment, aiming to construct 1,000 rental units. Danish-owned SEE Residential recently announced it is now the largest residential landlord in Sofia, with 208 rental apartments and plans to expand to 1,000 by 2030, focusing on sustainable housing for the growing middle class.
Minimum wage hike signals end of era of cheap labor
The minimum wage in Bulgaria was recently raised to 933 levs with a new increase to follow at the start of next year to 1077 levs. But some experts have said these hikes will erode the country's reputation as the champion of cheap labor hire.
The rapid wage growth in Bulgaria outpacing productivity appears to signal the end of the country's reliance on a low-cost labor model. While labor costs in Bulgaria remain the lowest in the EU, the significant increases in the minimum wage, as well as wages generally, are destroying this advantage.
Many companies are now finding it difficult to keep up with growing wage bills. Bulgaria's political instability only exacerbates this and makes new investment harder. As wages have surged-doubling since 2018-labor shortages continue to tighten, further complicating the economic landscape.
Former Bulgarian officials charged with EU funds fraud
Former Varna Mayor Ivan Portnih and former Regional Governor Stoyan Pasev have been charged by the European Public Prosecutor's Office (EPPO) with fraud involving EU funds. They, along with two officials from the Executive Agency Maritime Administration, are accused of falsifying documents and providing false information to secure funds from the European Maritime and Fisheries Fund.
The charges relate to the construction of the Karantinata fishing port in Varna's Asparuhovo district, funded by 8 million euros in EU funds and 6 million euros from the national budget. This is one of several ongoing investigations by the EPPO into large infrastructure projects in Bulgaria, though most have not yet led to formal charges.
Danes now dominate private rented sector
Rising housing prices driven by economic growth and loose monetary policies have made homeownership more difficult for the current generation compared to previous ones, according to a 2023 analysis by CMS and CBRE. As GDP rises, homeownership rates tend to decline, while the number of renters increases, suggesting that the Private Rented Sector (PRS) will become a significant asset class in CEE, including Bulgaria.
