Panel buildings in Bulgaria — is it worth buying an apartment in one

Practically every large Bulgarian city has residential neighbourhoods with panel buildings. “Panelki” (as Bulgarians call them) can also be found in central parts of cities.

Is it worth buying an apartment in a panel building in Bulgaria? The answer depends on many factors, including your budget. But apart from the low price, Bulgarian “panelki” have a number of other advantages, which we will tell you about.

It is commonly believed that panel construction came from the USSR and is a Soviet invention, but this is not the case. After 1945 intensive industrialisation of Bulgaria began, during which large groups of people moved from all over the country to nearby large cities. The growing population needed housing, and traditional 5-6-storey monolithic buildings were not quick enough to construct. That is why the state and the operating departments decided to reproduce a well-tested and proven design – the panel building.

Building panels are woven meshes of natural iron over which concrete is poured. They have different functions and types — floor, wall and facade panels.

One and a half million Bulgarians live in panel housing, in more than 700,000 residential apartments. Around 20,000 panel buildings are, for many foreigners, one of the symbols of Bulgarian homes. 

Property in a panel building — reasons for its enduring popularity

When it comes to buying property, there are at least three reasons why panel buildings cannot be excluded from the list of housing under consideration. 

• Supply — almost 70% of housing in the country was built in multi-apartment buildings of the socialist era, and new construction, despite several waves of growth since the 1990s, has not been able to provide enough apartments to satisfy those interested. 
• Demand — this type of housing is concentrated in the most economically developed areas of the country, where there is work, transport, kindergartens and schools. 
• Rumours of the imminent demise of panel housing are exaggerated. Despite the prevailing estimates that the service life of panels is 40-50 years, such buildings are successfully undergoing total reconstruction all over the world. As a result of renovation, the building’s serviceable life is extended by several generations. Consequently, even if the choice when deciding on a purchase is between a new “brick” and a 40-year-old “panel”, the economically justified answer may not be as predetermined as the aesthetic one.

What is renovation (саниране) of buildings in Bulgaria?

Renovation (саниране) of buildings in Bulgaria is the repair of a panel building, the modernisation and improvement of the thermal insulation and technical condition of the building.

By 2030, 4 billion euros will be allocated to improving the energy efficiency (renovation) of the country’s housing stock, with 8,000 panel blocks in the queue for renovation. These funds are set out in the National Plan for Energy and Climate (2021-2030).

To date, more than 2,000 housing units have been completed under the National Programme for Energy Efficiency of Multi-Apartment Residential Buildings, fully financed from the Bulgarian Treasury. Two billion leva have been invested in their rehabilitation.

The cost of a square metre of housing in a panel building

According to realtors, the average price difference between the two types of housing is 20%-25%.

Currently, in the most dynamic property market, in the largest cities — Sofia, Varna, Plovdiv — the price difference between a panel building and a new build is around 300 euros per square metre.

For example, in the Chayka residential district, which is near the centre of Varna next to the Seaside Park, you can find a two-room brick apartment in a new build at a price of 1,100 – 1,300 euros per square metre, while in a panel building it costs from 850 to 1,000 euros per “square”! That is, for an apartment of 70 sq.m., in one case you will need 77 thousand euros, and in the other – 59 thousand euros, a difference of 18,000 euros in favour of the panel building. 

You need to know: banks’ assessment of panel buildings

Banks are not fond of panel buildings, judging by their terms. Some of them want a mortgage loan for the purchase of a panel apartment to be repaid while the serviceable life of the apartment does not exceed 55-60 years. That is, if today you have chosen an apartment in a multi-apartment building constructed in 1980, of panel type, then the loan must be repaid no later than in 15 years, which can be a significant inconvenience. In the case of a longer revision of the schedule, the borrower has the opportunity to pay a smaller monthly instalment.

Other financial institutions provide a smaller share of the transaction amount. That is, instead of financing up to 80%, the bank sets a maximum of 60%, so the remaining 40% will have to be provided by the client. 

What are the advantages and disadvantages of panel buildings?

The price of apartments in panel blocks is much lower. 

You also do not need to pay a large percentage for the common parts of the building. In other words, you pay for what you get. In a new build, the percentage of common parts can exceed 12-15%. A one-room apartment in old panel construction with an area of 60 square metres actually corresponds to its stated area, whereas in new construction we observe a discrepancy between the documents and reality — the actual area of a one-room apartment in a new build does not exceed 40 sq.m. Between the two types of housing, the difference is about 20 square metres, which roughly corresponds to the normal difference between rooms.

Rooms in panel blocks are wider and better arranged than in most brick buildings constructed after 2000.

The kitchen is in a separate room. Only a small percentage of new builds can boast such a luxury. In new condominiums, the kitchen is transformed into a kitchen corner located in one part of the living room.

The main disadvantage of panel blocks is heating. Usually the building has central heating. Even if you choose to heat by another method or do not live in the apartment in winter at all, you will have to pay the «Building Installation» charge, because the pipes pass through the rooms of the apartment.

In most cases, after investing in an apartment in a panel block, it is necessary to carry out repairs, replace windows or insulate, replace flooring or plumbing. These repairs further increase the cost of the property and require a lot of time. That is why most buyers turn to the option of buying a home in a new build, focusing on the quality of construction.

A significant disadvantage of panel buildings is the large number of apartments and, accordingly, residents, which makes it difficult to organise maintenance and repairs.

Theoretically, the service life is 50 years. In practice this term can be doubled with proper care and full renovation of the buildings.

Poorly maintained common parts are noted as a drawback, but this argument can easily be refuted, because the condition of the common parts depends entirely on their residents, and they can be in equally poor condition in a recently built house if the residents do not take care of property management and its upkeep.

Some buyers are also put off by old lifts, but the reliability of the equipment again depends on its maintenance. Most of these lifts have extremely strong steel cables and safety devices in case of breakdown.

Conclusions: an apartment in a panel building is a good investment if you are looking for a large area but have a small budget. And if you do not want to carry out repairs after buying a home, and you wish to choose the layout, floor and other characteristics of the apartment, then new construction will suit you better, especially as the quality of construction in Bulgaria is getting better year by year.

Bulgaria Avenue will be glad to make the right choice together with you — get in touch and we will select the best home for you to live in.