House prices in the coastal city of Varna are rising - what are the reasons?

The article, published by the Bulgarian national broadcaster По света и у нас – БНТ Новини, analyses the recent surge in residential property prices in Varna, Bulgaria’s major coastal city. It draws on data extracted from the broadcaster’s news website and reflects the perspective of local experts and market observers on the factors influencing the housing market.

In the second quarter of 2024, property prices in Varna and its surrounding region rose by nearly 16 percent year‑on‑year, making the city one of the most expensive real‑estate markets in Bulgaria after the capital, Sofia. The average price per square metre for a centrally located apartment now stands at approximately €2,060, while more affordable two‑ to four‑room units average around €1,850 per square metre.

Several key factors are identified as contributors to the price increase: a 5 percent rise in the number of completed transactions compared to the previous year, expectations of Bulgaria’s forthcoming entry into the Eurozone, and a constrained supply of secondary‑market properties as owners delay sales in anticipation of higher future values. Demand is especially strong for sea‑view apartments, many of which are sold before construction is completed despite higher price tags.

Bank‑loan financing now accounts for over 65 percent of all property transactions in Varna, reflecting a growing reliance on mortgage credit. Although the Bulgarian National Bank has recently tightened mortgage‑lending regulations, experts anticipate a modest decline in loan‑financed deals in the coming year, but the overall high level of financing remains a notable feature of the market.

Fully furnished, completed apartments are regarded as the most liquid assets, allowing new owners to move in immediately. Buyers prioritise location, infrastructure, building completion status, interior finish, and especially the view. These preferences reinforce the premium placed on sea‑view units and well‑situated properties.

While the article does not directly address sustainability, the rapid price appreciation and high demand for new builds suggest increasing pressure on developers to incorporate energy‑efficient designs and environmentally friendly construction practices to meet buyer expectations and regulatory standards across Europe. The anticipation of Eurozone entry may also stimulate alignment with EU sustainability directives in the housing sector.

Despite some speculation about a slowdown, experts do not foresee a significant drop in property prices in the near term. The combination of limited supply, strong financing, and macro‑economic expectations related to the Eurozone entry supports a continued upward trajectory for Varna’s residential market.