Forecast: In 2022, the demand for housing will exceed supply

The supply of residential properties next year will not be able to meet the demand. In addition to traditional reasons such as personal necessity and the desire for a secure investment, there are additional factors that catalyze the activity. This is stated by the National Association of Construction Entrepreneurs (NASP) in its forecast for the coming 2022.

The analysis highlights two sustainable trends - rising price levels and increasingly demanding buyers, as well as moving from a home in panel block to a home in newly constructed buildings.

"An ongoing trend is the internal migration - more and more people continue to move to big cities, where they can find better incomes and living conditions. Big cities are also preferred by those who have worked abroad and are returning to Bulgaria in order to establish themselves permanently. Both groups are active buyers of real estate," said Georgi Shopov, chairman of the Association of Construction Entrepreneurs.

According to him, among the key factors that will have a strong impact on the construction sector next year is the desire of people to improve the environment in which they live. The group of buyers who have lived in panel blocks so far, but have set aside funds and decided to invest in a new apartment, is already sustainable. To co-finance the deal, they either sell the old property in the panel block or use a mortgage.

"Low interest rates on mortgages and easy access to these loans will also increase demand in 2022. Unfavourable deposit conditions and rising inflation rate leave people less and less hesitant about what to do with their savings - these buyers want to protect their funds from devaluation," says Georgi Shopov.

According to him, not only the activity and interest of buyers will be the reason why supply cannot "catch up" with demand. Some difficulties in building new projects are also a factor. As such, Shopov points out the great administrative burden in the implementation of each new site, but also the shortage of vacant land with appropriate infrastructure.

According to the Association of Construction Entrepreneurs, in 2022 we will see additional growth in prices, which will be about 17%, the main reason for this will be the dynamically rising inflation. The association points out that at the moment the growth in the prices of construction materials is equal to 27% since the beginning of 2021. There is a serious money supply, which has been put into circulation. Another reason for the increase in prices is the administrative burden in the investment process, which leads to a decrease in supply, and hence - to an increase in the price of the final product, NAPA commented.

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