site.btaHigh Prices Could Be Cooling Real Estate Market Even if Interest Rates Remained the Same - Finance Ministry

The high housing prices could be among the leading factors cooling the real estate market, the Finance Ministry says in its monthly review of the Bulgarian economy for October. Another strong factor for the further drop in demand could be the rising interest rates.

The analysis quotes Registry Agency figures showing that the third quarter of 2022 saw a 7.1% year-on-year decline in transactions, compared with an average increase of 30.1% in 2021.

The number of mortgages also fell, by 2.4% in the summer months.

"Against the backdrop of fewer transactions and mortgages, average monthly new home loans remain comparable to those of the second quarter and very high historically, which can be attributed mostly to price growth," the Finance Ministry says.

The analysis also looks at the unemployment rates: the number of registered unemployed at the end of September fell to 138,380, which was a 30-year low.

The Ministry analysts say that the shortage of skilled labour continued to be one of the main obstacles to business development, with the need for additional employment likely to be met by persons currently outside the labour force.

They expect the trend in the dynamics of the registered unemployed to be reversed in the last three months of the year and start to increase.