The Property Market in Burgas in 2025: High Interest Rates Failed to Cool It Down

Introduction: An Unexpected Market Twist

In recent months, despite forecasts of a slowdown, the real estate market in Bulgaria continues to show exceptional resilience. This trend is particularly visible in large cities, including Burgas. Experts note that despite the rise in interest rates on mortgage loans, which traditionally should cool buyer enthusiasm, market activity remains high. This paradox raises many questions about the future of housing prices and property accessibility.

Market Drivers: Inflation and the Expectation of the Euro

One of the main factors sustaining interest in real estate is ongoing inflation. In an unstable economic environment, many Bulgarians see buying property as a secure way to preserve their savings from devaluation. The demand for “brick and mortar” as a refuge from inflationary processes is especially strong, and this directly influences prices, pushing them upward. At the same time, the expectation of the country's imminent adoption of the euro also plays a key role. Buyers, especially those with greater financial means, are rushing to finalize their deals before the potential conversion of the lev to the euro, which some believe could lead to an additional price increase.

Prices and Accessibility: Moderate Growth and Challenges

Although the market remains active, the rate of housing price appreciation is more moderate compared to the rapid growth observed in 2022 and 2023. This trend is healthy and allows the market to stabilize. However, high interest rates on mortgage loans, which have reached levels not seen in years, make buying a property significantly more difficult for young families and people with average incomes. Many of them face the challenge of meeting banks' stricter requirements and paying higher monthly installments. This creates a kind of pressure that could lead to a redistribution of buyers and a change in market dynamics in the long run.

The Rental Market: New Horizons

A natural result of the increased inaccessibility of properties for purchase is the stimulation of the rental market. More and more people who cannot afford a mortgage loan or do not want to commit to one at the current high interest rates are turning to rental housing. This trend leads to an increase in rental prices, which in turn makes real estate investment for the purpose of renting it out more and more attractive. This closes the loop, further supporting the demand for properties for purchase, but this time from investors, not people looking for their own home.

Conclusion: The Real Estate Market Facing a New Equilibrium

In summary, the real estate market in Burgas and the country in 2025 is in an interesting phase. High interest rates have failed to cool it down; rather, they have redirected the focus from buying for living to investment. The combination of inflationary pressure, the expectation of the euro, and the reorientation of buyers are keeping prices stable, albeit at a more moderate growth rate. The market is adapting, finding a new equilibrium where housing prices continue to rise, but rents also become higher, providing an alternative for those who cannot afford their own home. The future will show whether this trend will be maintained or if a more significant correction will occur, but for now, the picture is one of stability and activity.