What Happened to the Real Estate Market During the Corona Crisis Over the Past Two Years?

At the very beginning of the pandemic, many experts predicted that property prices would „fall“. However, that did not happen. Unlike most sectors of the economy, the real estate market held firm and we can even boldly say it is thriving.

What are the forecasts for the real estate market in 2022 as a result of the various factors that are the main drivers in the sector

Let us first take into account the crisis with construction materials. Why are they getting more expensive?

Unfortunately, there is not just one reason for the increase in construction material prices. Disrupted deliveries and factory operations, rising prices of raw materials, gas, electricity and, above all, transport, are some of the main reasons for this fact. The increase in product prices is over 30%, or in other words, approximately 600lv. difference per ton of construction steel. As we know, a huge share of the construction materials used in Bulgaria are imported, which also has a huge impact on the price of the final product. Since our main suppliers are Ukraine and Russia, following the military invasion in Ukraine, sales and imports of key construction materials have been suspended, which has a negative impact and has halted the work of some construction companies in our country.

How will the rise in material prices affect the property market

As we mentioned earlier, the increase in construction material prices is over 30%. This undoubtedly brings changes in construction and will certainly affect final property prices as well, with the specialists at „Титан Пропъртис“ forecasting a 10-15% increase. However, no stagnation or decline in transactions is expected, especially with this level of mortgage interest rates. The fear of rising inflation and the devaluation of money is prompting people to turn their funds into assets, most often by purchasing real estate.

What can we expect from the market going forward, after the start of the war in Ukraine?

Like every crisis, the war in Ukraine will lead to chaos in different sectors of the economy. The real estate market is difficult to predict and very dynamic, but at the moment we cannot speak of a future decline in real estate transactions. The fact is that, at present, real estate transactions in the rental sector have increased several times compared to the previous month. A large number of refugees from Ukraine have sought refuge and a home in Bulgaria, especially in our coastal cities - Varna and Burgas.