Abstract

This paper examines the structural drivers of housing prices in Bulgaria from 2002 to 2024 using a Structural VAR model based on the expectations-driven framework with inelastic housing supply and amplified financial sector. Historical decomposition reveals that speculative dynamics and expectation shocks became dominant recently. The findings highlight the increasing role of financial and behavioral channels, alongside fundamentals. The study contributes methodologically by offering the SVAR-based decomposition of housing prices in Bulgaria and emphasizes the need for expectation-sensitive macroprudential policy.

JEL: C32, R31, E44