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Will eurozone entry cause another property bubble in Bulgaria?

Petar Mastikov, chief analyst at the Bulgarian National Registry for New Constructions and Reconstructions, has expressed concerns over a possible speculative surge in property prices across Bulgaria once the country enters the eurozone.

Mastikov envisions a short-term upswing, less intense than the notable peaks observed in the past two years, followed by a subsequent stabilisation in the real estate market. For the year 2024, he projects property price growth in the range of 2% to 5%, citing the impending eurozone entry and full Schengen membership as driving factors.

While a slight cooldown is expected in residential construction, with a projected decline of up to 5% in 2024, office space appears poised to maintain its momentum, with an expected continuation of the 30% construction growth witnessed in 2023.

The holiday construction sector is also anticipated to see a significant surge, with projections exceeding 20% growth, attributed to the anticipated positive impacts of Bulgaria's Schengen membership, with contributions expected from the Romanian market.

Mastikov highlighted that 2023 marked a significant milestone, recording the highest volume of new construction in all property segments since 2008, totaling 7,650 million sqm of useful floor area. Despite a year-on-year decrease of 6.6% in residential construction, other segments, including public and specialised buildings, hotels and holiday spaces, experienced growth, effectively compensating for the slight decline in the residential sector.

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