The price of land can form over 70% of the cost of a residential project in the most prestigious areas, said the construction entrepreneur Eng. Georgi Shopov, manager of “Tobo Group“. In more popular locations, the share of the terrain is about 30%, he pointed out.
His comment comes against the backdrop of a discrepancy between the number of transactions and the prices of homes in Sofia. According to data presented by Shopov, preliminary contracts for the purchase of homes have decreased by about 18% on an annual basis, while prices have increased by 15%.
“In the past year, we have observed a decrease in the number of transactions. Interestingly, prices have increased by 15%. It is very rare in a market economy to observe such a process. Fewer contracts, and prices are increasing“, commented Shopov.The entrepreneur specified that the 18% drop refers to preliminary contracts, not final transactions. According to him, this indicator gives a faster idea of the current state of the market, since the transfer of ownership can take place up to two years after the initial negotiation.
Official data confirms the continued increase in housing prices. The National Statistical Institute reports a 15.5% increase in prices in the second quarter of 2026 compared to the same period of the previous year.
Separately, according to data cited by Vesti.bg, 8,874 transactions were registered in Sofia in the second quarter, which represents a decrease of 16.7% on an annual basis. This indicator is not entirely identical to the preliminary contracts that Shopov is talking about, but it also shows a cooling of activity with prices remaining high.
Land and infrastructure make projects more expensive
According to Shopov, prices are simultaneously affected by inflation, high demand, the rise in the cost of construction materials and labor, as well as the shortage of suitable land. According to him, inflation for the period under review is around 12.5%.
He warned that even if the costs of construction itself remain relatively stable, housing may become more expensive due to the land. According to him, some owners set prices that do not correspond to real market conditions, and thus the plots remain inaccessible for investment.
Shopov also criticized the Sofia Municipality. He claims that not enough new regulated areas are being created and the necessary infrastructure is not being built in existing neighborhoods.
“The municipality is responding to the increased demand for housing not by fulfilling its main function, creating infrastructure around them, but by hindering the development of new construction“, the entrepreneur said in the podcast “Square Meters“.According to his calculations, the construction sector contributed about 7 billion leva to the state treasury in the previous year, but an insufficient part of the public funds is returned in the form of streets, communications and other infrastructure. Shopov pointed out that construction companies are increasingly forced to finance such activities themselves.
Forecast for a limited decline in transactions
Shopov does not expect a dramatic collapse in the market. According to him, the decline in the number of transactions will not exceed 20%, after which activity may stabilize at the levels reached for several years. He explained the current decrease with the extremely active demand in the previous year, when many buyers had already realized their intentions.
Detailed statistics on the average prices of properties in Bulgaria by cities and neighborhoods can be seen at imot.bg