A total of 10,008 real estate deals were registered in the coastal municipality of Nesebar in 2022, up 37% year on year and the highest result seen since 2007, when 10,084 transactions were reported. That puts Nesebar ahead of regional centers like Burgas, Ruse and Stara Zagora and right after Sofia, Plovdiv and Varna, Bulgaria's largest cities. The average number of deals in the country last year declined by more than 2%, while Nesebar booked the highest growth.
Half of the buyers were Bulgarian citizens from cities like Sofia and Plovdiv, as well as expatriates. The other half comprised foreigners - mainly from Poland, the Czech Republic and Germany. The main driver of the purchases was inflation and people's desire to shelter their savings.
After a strong 2022, however, there has been a rapid drop in the number of property deals since the beginning of this year. Brokers in Nesebar expect that in the next six months prices will decline by up to 20% due to subsiding demand induced by general insecurity. Some of last year's buyers may see the price of their real estate decrease, Elena Toncheva of Yavlena real estate agency in Nesebar believes.
Strong yearMost Bulgarians purchased property in the region in order to use it as second home during the summer, says Stiliyan Georgiev of Bulgarian Properties in Slanchev Bryag, one of the resorts in Nesebar municipality. A lot of homes owned by British and Russian citizens that had been put up for sale some two years ago were also sold in 2022.
According to Yavlena, prices started from some 900 euro per sq. m and reached 1,200 for luxury property but the average rate was 1,000 euro per sq. m. Data of Bulgarian Properties show the average prices in Nesebar and Sveti Vlas were about 860 euro, 800 euro in Obzor and 700 euro in Slanchev Bryag. All brokers say most deals in 2022 were paid in cash and very few buyers used mortgage loans.
Calm before the storm
Both enquiries and transactions have fallen sharply this year and that will be seen in the first-quarter statistics of the Registry Agency, Yavlena's Toncheva says. According to Stiliyan Georgiev, some deals from 2022 were completed in the first quarter of this year, so the official data will not show such a big drop.
The insecurity about the war in Ukraine and the political instability in Bulgaria, as well as the already inflated prices will sober up the market. Both Toncheva and Georgiev expect these factors will reduce prices.
On a national scale, the prices of residential property in the first quarter of 2023 edged up by 0.4%, year on year, National Statistical Institute data show. The capital city of Sofia, however, saw a 2.5% drop and prices were flat in Plovdiv, the second largest city. In the European Union, it was for the first time since 2015 that Eurostat reported a decline (-1.5%) in prices in the last quarter of 2022.
The number of real estate deals in Bulgaria fell for two consecutive quarters in 2022. In July-September transactions dropped by 7.3% compared to the preceding quarter, and in October-December, by 10.4%. A further decrease by 9% was registered in the first quarter of 2023.
Analysts say that demand - even though reduced - is still higher than supply and the market is trying to reach a balance. On the whole, they do not expect rapid changes but a gradual move to fewer deals, slow-down in the price increase and more discounts.