Two years of changes. This is how 2025 and 2026 can be briefly described for the real estate market, and in particular for housing. Last year was marked by the introduction of the euro - a process that led to an increase in the number of transactions, but also to an increase in prices. However, the current year is more interesting for the real estate market, as we are observing something new that has not happened in the last 30 years, namely a decrease in the number of transactions, but a continued increase in the price per square meter of residential area. At first glance, this is a paradox, since market participants were used to the fact that if there is a decrease in transactions, then the price must necessarily be taken into account, or at least not register an increase. What is the reason for this atypical picture for the Bulgarian housing market?
„First of all, we have a very aging housing stock, and the representatives of the new generations – Z, the millennials, are looking for a modern place. They want not only a new home, but also a new environment“, says real estate investor Ivo Dimovski.
There is also strong intra-neighborhood migration. „People who live in Nadezhda, in an old panelka, want to live in a gated complex, where their child can run, where they can go to the playgrounds, where they can also go to their grandmother in the panelka across the street. When you enter a neighborhood, you see this process – from old to new“, adds Dimovski.
The second factor that outlines today's picture on the market is mortgage loans. In reality, they have doubled in value in less than 3 years. In the first quarter of 2023, the value of all mortgage loans in Bulgaria was 8.7 billion EUR. As of July 2026, this value is already 19 billion EUR.
„Many people are asking themselves what is happening in the market and how prices have become so high. The truth is that the price of the value of money is so low that its accessibility has actually become so good and great that Bulgarians have taken out twice as many housing loans in just 3 years“, explains the property expert.
A large part of these loans are today concentrated in Sofia. Data shows that in the capital, 60% of clients buy with a mortgage loan versus 40% with their own funds. In Plovdiv, the percentages are almost equal, while in Varna the picture is the opposite of Sofia – 40% acquire properties with a mortgage loan, and 60% rely on their savings.
A large part of the people who acquired a home with a bank loan acquired it for investment purposes and rent it out. In the next 20-30 years, they will cover the monthly installments with the monthly rent they receive and from this point on, they do not think about entering the property market anytime soon.
The psychological factor plays a very big role, according to Dimovski: “There are people who were waiting for the euro to enter so that they could see how far the price level of their property would go. These are people who have inherited properties, properties acquired through compensation. They knew that the euro would be almost the big peak. And after this peak, they did not know exactly what would happen. What we are seeing, however, is that transactions are falling, but they are falling at a normal pace“, adds Dimovski.
The real sellers are those owners who have been considering selling their property for the past 5 years anyway, but have been waiting for the euro to see how far prices will go. All the others who have properties for their own use or investment properties have no need to sell. The third group are the speculators. All three groups do not feel an urgent need to sell and therefore prices are not falling.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be seen at imot.bg