9 percent the homes in Bulgaria have a higher price in the third quarter of 2017 compared to a year earlier. This places Bulgaria on the seventh position in the European Union on the rise in prices of houses, Eurostat data show.

The largest annual house price increases were reported in the Czech Republic (12.3%), Ireland (12%), Portugal (10.4%), Hungary (10.2%), the Netherlands (10.2%) and Latvia (9.5%). Only in Italy home prices have fallen by 0.9%, according to Eurostat data. On average, for EU, house prices have risen by 4.1 per cent in the third quarter of 2017 compared to a year earlier.

Meanwhile, the BNB has warned banks to pay attention to housing loans because the rise in property prices hides dangers. In its report on the state of the banking system for the third quarter of 2017, the central bank advised credit institutions to be more conservative in funding for economic sectors and high indebtedness. In addition, the BNB warns that rising real estate prices will not be forever, and banks should not lower their requirements for a healthy ratio between the amount of new loans and the value of mortgaged properties.

At the end of last year, in its report on excessive macroeconomic imbalances, the European Commission also warned of a risk in the property market due to the high indebtedness of businesses and households.