Residential property prices in the capital rose 5.9% last year, with an average increase of 3.2% for all cities in the ranking. It turns out that the real estate market in Sofia is performing better than in most major famines around the world.
Budapest regains the title of the city with the fastest rise in apartment prices in the world. Residential real estate in the Hungarian capital has risen in price by 24.1% over the year due to strong demand, supported by low mortgage rates, strong employment and economic growth.
After Budapest, the Chinese cities of Xi’an and Wuhan are in the top ten (data for Wuhan are before the Covid-19 crisis) with price increases of 15.9% and 14.9% on an annual basis, respectively:
– Zagreb (+ 14.5%), St. Petersburg (+ 14.2%), Warsaw (+ 13.1%), Athens (11.8%), Luxembourg (+ 11.4%), Lyon (+11) , 2%) and Bratislava (+ 10.2%). Double-digit growth in house prices was also registered in Moscow (+ 10%). Buying property in these famines turned out to be a very good investment.
Just before Sofia in the ranking are Mexico City, Montreal and Phoenix, and after our capital are Halifax and Izmir. In over 78% of the 150 cities included in the ranking, a rise in housing prices has been registered in the last year.
With extremely low interest rates on bank deposits, buying a home in these cities is a great opportunity to store available capital and achieve good returns.
It turns out that many cities in Central and Eastern Europe perform extremely well, such as Zagreb, Warsaw, Athens and Bratislava, which entered the top ten.
Two Russian cities in the index – St. Petersburg and Moscow, also climbed to a higher position in the rankings thanks to the good performance of the country’s economy and improving people’s attitudes to buying real estate.
7% yield brings one apartment
The yield on housing in the capital last year reached 7%. Purchases of apartments in Sofia for investment purposes have increased and now account for 24% of all transactions.
Most investors prefer to rent out their apartments for a long time, instead of relying on short nights from foreigners, brokers commented. In the apartments for the guests the profitability is not guaranteed.
Traditionally, the preferred properties for rent to tourists are one-bedroom apartments with good transport security.
“If the characteristics of the property and the building, as well as the feeling and comfort they create, are of the greatest importance when buying a home for one’s own use, then the price is leading in investment transactions,” brokers explain.
There are currently no tourists in the city’s guest apartments, but the owners hope the situation will change once travel and quarantine restrictions are lifted.
Buyers are turning mainly to housing in new buildings. “Owners of old, prefabricated homes who are considering selling should take advantage of current market conditions.
Their competitiveness compared to the new projects that are currently being implemented is declining and this will affect the time to find a buyer and the price he would pay for the property, “said Gergana Tenekedzhieva, CEO of a real estate company.