Buying a property in Sofia: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Sofia's property market is included in our pack

Thinking of investing in real estate in Sofia? You're not alone!

Many people are charmed by Sofia's cultural heritage and dream of owning a cozy apartment or a stylish townhouse in this city.

Still, would it be a smart investment? Are property prices increasing in Sofia? How much does it cost? Is it wiser to buy property in the city center or Lozenets? Is there any hidden tax? What rental yields should I expect?

We have all the answers you need.

The Investropa team has thoroughly explored this market. Actually, we've organized all our findings in a pack. Get it now.

In this article, get ready to receive valuable insights from us.

How's the property market in Sofia?

Is the property market doing well or poorly? People disagree. Instead of listening to opinions, we prefer to look at data and stats to find the real answers.

Types of properties

In Sofia, you can find a variety of properties for sale to suit different preferences and needs.

These include apartments, houses, and condominiums.

Apartments offer compact living spaces within larger buildings, often with amenities like gyms or pools. Houses provide more space and privacy, with options for standalone homes or those in gated communities. Condominiums are individually owned units within a shared complex, combining some benefits of apartments and houses.

Whether you're looking for urban convenience, suburban comfort, or a mix of both, Sofia's property market offers a range of choices for potential buyers.

Buy or rent?

(If you plan to use it yourself and not as a rental)

If Sofia, the capital of Bulgaria, has caught your interest as a place to settle, you might be thinking about the pros and cons of buying versus renting a property.

Without a doubt, it's better to buy if you want to build long-term wealth and benefit from potential equity growth.

Our advice? Use the property price-to-rent ratio as your decision-making compass. It's a way to understand how many years of rental income you need to cover the property's current price.

According to Numbeo, the property price-to-rent ratio in Sofia is around 26.08, which is above the world average.

This value shows that it would take you 26 long years of paying rents before you can own a property in Sofia. However, if you rent for a long time, you won't own the property and won't save any money towards ownership.

Property prices in Sofia

On average, according to the last reported data from National Statistical Institute of Bulgaria, buying a property in Sofia will cost you around $2,770 per square meter.

Of course, there are notable differences. The value of a square meter for an apartment in Sofia city center might differ from a suburban house. We actually offer a more in-depth analysis in our pack for buying property in Sofia and in Bulgaria.

To give you a better idea, it means that, instead of buying an apartment in a big city like Paris, you can afford 5 properties in Sofia.

Moreover, housing prices in Sofia are cheaper (-26%) than in Belgrade.

The most expensive neighbourhoods in Sofia are probably Lozenets and Vitosha, while the cheapest are likely Lyulin and Nadezhda.

Trends

First and foremost, we have to acknowledge that Bulgaria is widely recognized, today, as a stable country. The last Fragile State Index that has been reported for this place is 51.6.

It is something to have in mind when wondering whether it's a good investment to buy a property in Sofia.

If we look at the forecasts made by the IMF, Bulgaria's economy is expected to soar by 12% in the coming 5 years, resulting in an average GDP growth rate of 2.4%.

If you want to invest in real estate in Sofia it's a good thing because it means people are getting richer and then housing prices are likely to increase.

Also, in Bulgaria, the average GDP per capita has changed by 20.8% over the last 5 years. Almost no country has done better.

According to this data point, property prices in Sofia might go higher in 2024 and also later on.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Bulgaria right now.

Buying property in Sofia

Buying real estate in Sofia can be difficult due to the lack of reliable and up-to-date information about the market. That's why we have created the pack to buy property in Sofia and in Bulgaria.

Buying process

Within our pack, we've covered the entire buying process extensively. This includes a detailed breakdown of prices and yields based on the area, advice on negotiating prices, and information about obtaining a mortgage.

Now, we're providing you with a simplified version.

This is the step-by-step process to purchase a property in Sofia:

1. Research properties in Sofia and set a budget.
2. Engage a local real estate agent with expertise in Sofia's market.
3. Arrange property viewings and assess their condition and location.
4. Conduct due diligence on the property's ownership history, utility bills, and title deed at the local Cadastre Agency.
5. Make an offer and negotiate the price, considering market trends in Sofia.
6. Sign a preliminary contract (known as "заявление за покупко-продажба") and pay a deposit (usually 10% of the property price).
7. Hire a solicitor to handle legal matters and ensure the property's legal compliance.
8. Obtain financing or make necessary financial arrangements with a Bulgarian bank if required.
9. Finalize the property's transfer of ownership by signing the Notary Deed (known as "нотариален акт").
10. Pay all relevant taxes and fees, including the property transfer tax and notary fees.
11. Register the property with the local authorities at the Registry Agency and get a new title deed on your name.
12. Receive the property title deed and complete the purchase, becoming the legal owner of the property in Sofia.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Bulgaria.

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Where to find a property

Start your property search in Sofia, Bulgaria, by exploring these websites:

• BulgarianHouse - Offers a wide range of moving services, including discounted and resale properties in Bulgaria.
• BulgarianProperties - A leading real estate company specializing in buying and selling properties in various locations like Sunny Beach, Bansko, Sofia, Varna, Plovdiv, etc.
• Property.bg - Offers a wide range of properties for sale and rent, including in major cities, resorts, and rural areas.
• Indomio - A platform to find houses and apartments for rent in Bulgaria, offering personalized searches with advanced filters and mobile-friendly listings on all devices.
• Bulgarian Resales - A real estate agency specializing in buying and selling properties in Bulgaria, offering a variety of options in cities and resorts with sea views.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Bulgaria.

Which properties for which budget?

As mentioned before, the average price per sqm in Sofia is $2,770. A one-bedroom property (60 sqm) would cost around $166,000, and a two-bedroom (85 sqm) would be about $235,000.

However, prices will change based on both the property itself and its location.

You can expect prices to be steeper in the upscale parts of Sofia. If you're eyeing a condominium in Lozenets, it could cost you around $320,000, while a villa in Iztok might carry a price tag of $620,000.

Some spots will be friendlier to your wallet. You might find a residence in Lyulin for $270,000 or a residence in Vitosha that's priced at $170,000.

We give more details about property types and areas in our full pack for buying property in Bulgaria.

Common pitfalls

Here are the main pitfalls when buying a property in Sofia, Bulgaria:

• Complex bureaucratic procedures and legal documentation.
• Risk of encountering unauthorized construction or illegal buildings.
• Unreliable or outdated cadastral maps causing boundary disputes.
• Exposure to fluctuating property prices influenced by economic factors.
• Potential issues with obtaining residency permits for foreign buyers.
• Cultural differences impacting negotiations and communication.
• Unanticipated restrictions on property usage due to heritage protection.
• Gaps in knowledge about unique property taxes and local ownership regulations.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Bulgaria Property Pack

Living in Sofia

Living in Sofia is a great experience, with plenty of cultural and recreational activities to enjoy, and a vibrant real estate market for those looking to purchase property.

Cost of living

The cost of living in Sofia is generally very affordable compared to other European cities. Prices for food, accommodation, transportation, and entertainment are all relatively low, making it a great option for budget travelers.

Here are some examples to better understand the cost of living in Sofia:

• Rent for a one-bedroom apartment in Lozenets neighborhood: $600/month.
• Monthly public transportation pass with Sofia Metro: $20.
• "Banitsa" breakfast at a local bakery: $2.
• "Rakia" at a bar in Studentski Grad: $3.
• Groceries at Zhenski Pazar: $80/week for a family of four.
• Basic utilities for an 85m² apartment with CEZ: $90/month.
• Ticket to a performance at the National Opera and Ballet: $15.
• "Ayran" at a street vendor: $1.50.

Neighbourhoods

We want to show information in a way that is easy to understand. So, we made a table that lists the different areas in Sofia. For yields, prices and rents, check our property pack.

Life in Sofia

Sofia is the economic hub of Bulgaria, with a strong and diversified economy that is largely based on services, industry and trade. The city is home to a large number of multinational companies and has seen a significant growth in its GDP in recent years.

Based on the IMF's data, Sofia's GDP accounts for almost 25% of Bulgaria's GDP. Investing in property in a city with a strong economy is a good idea because there are more jobs, lots of people want to live there, and property prices tend to stay steady.

What expats usually like the most in Sofia is the vibrant nightlife scene, with its many bars and clubs, as well as the city's historical sites and cultural attractions. The low cost of living and the friendly locals are also a major draw for expats.

Unfortunately, we can't say there is no crime in Sofia (the crime rate index is around 41, which is not so favorable. Examples of crimes in Sofia include pickpocketing, purse snatching, and other petty theft, which are generally targeted at the local population and do not affect the expat population significantly.

A good point for a property investor - Sofia has an extensive, modern metro system that connects the city center to various districts and suburbs.

Access to healthcare in Sofia is good, with a Healthcare Index of 57. An effective healthcare infrastructure always boost the appeal of a place, which is good for real estate.

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Renting out in Sofia

For those aiming to buy property solely for renting out and earning income.

Long-term

Tenant Profiles in Sofia

According to the data reported by Wikipedia, the home ownership rate in Bulgaria is 85%, which is rather high.

It is probably a bit less in Sofia which is quite different from the rest of the country.

If you decide to buy and rent out to long-term tenants, you should target young professionals, families, and students in Sofia. If you are looking to rent out for short-term, you should focus on tourists and businesspeople.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Sofia are within the 3-4% range. It's low. A good rental yield generally falls within the range of 7% or more.

Rentals in the center of Sofia tend to have the best rental yields due to the higher demand for rental properties in this area due to its proximity to public transportation, universities, and amenities. Additionally, rental properties in areas with a high concentration of young professionals also tend to be in high demand.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Sofia are taxed at 10%, which is very advantageous.

Short-term

You could also decide to rent short-term to business travelers, students, and vacationers visiting Sofia. Additionally, you could target people looking for a short-term rental for a special event such as a wedding or family reunion.

If you decide to go with that option, look for properties in the city center, near the main shopping streets and tourist attractions, such as Vitosha Boulevard and the Ivan Vazov National Theater. Additionally, look for properties in the Lozenets and Studentski Grad districts, which are popular among students and young professionals.

Currently, there are approximately 2,860 active Airbnb listings in Sofia, reflecting a highly dynamic and bustling short-term rental market. The average daily rate is at $50.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Sofia can make around $700 per month. Also, the average occupancy rate is estimated at 69%.

Is it worth buying real estate in Sofia then?

Buying property in Sofia can be a savvy move if you're in it for the long haul. Sofia's stability and growing economy make it a promising destination for real estate investment. The property price-to-rent ratio suggests that owning a property could lead to long-term financial security, and with Sofia's expected GDP growth and low cost of living, property prices are likely to rise.

Additionally, if you plan to rent out your property, there's income potential, with rental yields and a 10% tax rate that are quite favorable.

However, if you're a short-term thinker or your future is uncertain, buying property in Sofia might not be your best bet. The upfront costs, bureaucratic hurdles, and the risk of market fluctuations may not align with your goals. Plus, if you're not well-versed in Bulgarian property regulations, it could lead to unexpected complications.

So, before taking the plunge, weigh your circumstances carefully. Sofia's property market has its charms, but it's essential to ensure they align with your vision and timeline for the future.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.