Demand for residential property rentals in Sofia significantly decreased compared to last year.

The deals since the beginning of the year are almost two times less than the same period in 2017. The reason for the weaker market activity is the significant increase in rental prices. In some neighborhoods, growth exceeds 20% on an annual basis.

Increasingly noticeable is the opening of the scissor between tenants and tenants. Property owners are influenced by the active housing market and economic growth in the capital, which is why some of the properties are offered at inflated prices. As the appreciation is not justified due to a change in demand, we are already seeing its negative impact on the rental market.

The difference in bid prices compared to last year is tangible. The average rental prices for one-bedroom apartments already reach 750-800 leva, compared to 600 leva in 2017. In the case of two-bedroom apartments there is a similar change - from 800-900 leva last year, the rents are already around 1000-1100 leva. The biggest increase is in the districts of Drujba, Vitosha and the eastern districts of the capital. On the other hand, the funds available to tenants remain at last year's levels. Because of this, customers find it hard to find the desired home.

Landlords are currently strong on the market and often ignore the consultants' opinion on the actual status of this segment. There are even occasions when hours after the meeting with an agency, the client himself decides to adjust the offer price with higher.

Rising rents, along with low interest rates on loans, are pushing customers out of this market and turning them into future buyers. Under current bank conditions, monthly rentals often exceed credit installments, which predetermines the choice. This is also one of the factors for maintaining high activity in the purchase and sales market during the summer months of 2018.