Bulgaria is entering a new phase in its housing market, with analysts predicting the end of the “panic” buying that fueled double-digit price increases in 2024 and 2025. Buyers are becoming more cautious, and market growth is expected to moderate. This assessment was made by Petar Mastikov, chief analyst at the National Register for New Construction and Reconstruction, in an interview with BTA.

Following the record price surge of recent years, most forecasts for 2026 indicate an increase of between 5 and 10 percent nationwide. In Sofia, prices are expected to rise by 8–12 percent, with average new apartment prices already at 2,487 euros per square meter (around 4,879 BGN/m²). In upscale neighborhoods like Oborishte, prices reach 3,764 euros/m² (7,380 BGN/m²). Other major cities such as Plovdiv, Varna, and Burgas will also see continued price growth, but at more normalized rates following the sharp jumps in 2025 - Burgas alone experienced an increase of nearly 26 percent that year.

The rise in construction and installation costs remains a primary driver of housing prices. Data from construction companies indicate a 15–18 percent increase in 2025, a trend expected to persist in 2026, with material and labor costs potentially accelerating due to Bulgaria’s recent adoption of the euro. Mastikov emphasized that this factor will continue to underpin price growth, even as buyer behavior becomes more measured.

In terms of housing types, the trend in Bulgaria’s leading cities - including Sofia, Plovdiv, Burgas, Varna, Stara Zagora, Pleven, Ruse, Haskovo, and Kazanlak - remains focused on two- and three-bedroom apartments. Holiday properties are also attracting renewed interest, particularly along the Southern Black Sea Coast, while single-family homes maintain strong appeal. Smaller towns surrounding major urban centers are increasingly becoming active construction sites, with private houses and larger investment projects underway.

Preliminary statistics for 2025 show that the total area of newly started construction reached 8.6 million square meters, marking a 7.5 percent increase compared to 2024. Residential construction accounted for the majority, with over 5.96 million square meters, while second-home and holiday properties grew 35 percent year-on-year, totaling 171,098 m². The capital remained the most expensive market, registering a 23.49 percent rise, with central Sofia averaging 3,327 euros/m² (6,521 BGN/m²). Coastal cities also recorded substantial increases: Burgas +25.76%, Plovdiv +15.74%, Varna +14.18%.

The market has entered a more mature stage, with the rapid “panic” purchases of 2025 tapering off. Mastikov notes that the reduction of banks’ mandatory reserves from 12 percent to 1 percent following euro adoption has freed around 16 billion leva (approximately 8.2 billion euros), helping to stabilize mortgage rates at 3–3.5 percent despite wider European trends. Combined with higher incomes, high demand, cheap financing, and limited availability of modern quality housing, these factors continue to drive construction activity.

Industrial and warehouse construction is slowing slightly, with newly launched areas decreasing 8.27 percent to 950,000 m², reflecting broader economic shifts rather than a sectoral crisis. In contrast, public and specialized buildings - including schools, hospitals, and kindergartens - expanded by 321 percent to 384,000 m², reflecting both government investment and private hospital expansion. Office space construction surged 95.62 percent to 360,000 m², primarily in Sofia, while commercial property growth was moderate, at 4.31 percent, following the absorption of earlier large-scale retail projects.

Holiday property construction remains dynamic, with a 53.43 percent increase to 441,407 m², largely driven by renewed investor interest and the Southern Black Sea region’s importance to Bulgaria’s tourism economy. Overall, residential development still dominates, representing nearly 69 percent of all construction launched in 2025.

Looking ahead, Mastikov emphasizes that Bulgaria’s entry into the eurozone will act as a long-term economic catalyst. Joining the currency union changes not only financial conditions but also investors’ perception of stability and risk. While the sector faces new challenges, the overall effect on construction, property prices, and investment sentiment is expected to be strongly positive over the coming decade.