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The market for luxury properties in Sofia is on the rise and has seen significant growth since 2020. This has been confirmed by industry experts, who have observed an increase in transactions and prices in the most preferred areas of the capital. In this article, you will find Pascal Duffy's expert opinion on the main aspects of the market, the preferred locations, the characteristics of the sought-after properties, as well as the challenges and future trends that shape the luxury real estate segment in Sofia. Pascal is the Managing Director of First Estates, a company specialised in the luxury real estate market in the city center of Bulgaria's capital - Sofia.
How is the luxury property market in Sofia?
The market is in a positive cycle. Since 2020, the deal activity increased significantly and the prices in some of the most preferred areas have gone up between 30 to 50%. In the recent 2 quarters there is some stabilization - buyers need some more time to take a decision and look at more properties. Sellers, on the other hand, are getting more reasonable, which should help the number of transactions to still be higher than the average for Sofia.
What are the preferred locations for luxury properties in the city?
Traditionally, locations such as top center, Oborishte, Doctor’s garden, as well as Lozenetz and Iztok are the most preferred ones. Southern districts - Boyana, Dragalevtsi, Simeonovo and Bistritza are also in demand when it comes to luxury houses and apartments closer to Vitosha mountain.
What features are buyers of high budget properties looking for?
Buyers are looking mostly for finished apartments, well-built and with spacious layouts, well maintained common areas and sufficient parking places. Security of the location and quality of surroundings are also crucial factors.
What is the average price per square meter in the luxury segment?
Broadly speaking, the average prices range between 2,500 – 4,000 EUR per sqm, depending on the location, size, interiors and other key characteristics. Cartain streets can fetch up to 8000 Euro per sqm. The market is evolving in a way that the price points for market value of luxury units are more and more referred to as absolute amounts, rather than price per sqm. For example, 3BR apartment in Lozenetz for around 450,000-500,000 EUR, 4BR house in Malinova Dolina – 500,000-600,000 EUR
Is there an upward or downward trend in demand for luxury properties?
The property segment in general continues to be favored as a relatively secure asset to invest in. The luxury part of the segment attracts a higher proportion of foreign buyers, in addition to locals, who are mainly buying with own funds. Very often there are specific searches which are difficult to be satisfied. That’s why I believe the segment is well-positioned in terms of demand.
What are the challenges in high-end property transactions?
People often think that a real estate transaction is always the same and happens very easy. There are always specifics and sometimes complications due to the difference in clients’ expectations in terms of transaction price, process flow or timing. The truth is that many clients are not prepared with their papers, so that we broker a simple transaction. In addition, due to the higher amounts, buyers are often looking to use tax-efficient ways to structure the deal which needs more time and coordination between the parties involved.
How is the economic environment affecting the luxury property market?
It’s definitely positive for now. Property taxation is one of the lowest in Europe, banks’ lending terms are very favorable and will remain so for the short to medium term. Joining the Eurozone should further improve the market liquidity.
What predictions do you have for the future of luxury real estate in Sofia?
As mentioned before, I am optimistic about the market in Sofia, as part of the Central European market. In this regard, we have a lot to catch up in terms of improving the product being offered, the city infrastructure, and respectively the average property prices.
The luxury property market in Sofia continues to be attractive for both local and foreign buyers. Stable transaction and price growth, low taxation and favourable lending conditions contribute to the positive outlook of the market. Despite challenges related to document preparation and specific customer requirements, the segment remains well positioned. Expectations for the future are optimistic, with the potential for infrastructure and product improvements that will strengthen Sofia's market position in Central Europe.
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