What will happen to housing prices after the introduction of the Euro?

Bulgaria’s residential property market has been at the center of expert analysis, as recent years have seen rapid price growth, record-high transaction volumes, and an active mortgage segment. Although the data points to stability, this stability is often shaped by expectations and market narratives, not only by fundamental economic indicators.

Joining the Eurozone introduces a new institutional framework, but its impact on housing prices will be mostly indirect - through access to credit and the lending policies of banks.

Experts agree that the market is approaching its peak. The main challenges in the coming years will stem from shifting buyer attitudes, changes in lending dynamics, and the balance between supply and demand.

Borislav Gostev, General Director of Super Credit by LUXIMMO Group

2025 is expected to mark the market’s peak, with projected price growth of 15–18%, supported by accumulated demand and limited supply. From 2026 onwards, analysts expect a return to more moderate single-digit growth (around 6–10% annually), in line with income dynamics and potential new macroprudential measures by the Bulgarian National Bank in response to the active mortgage market.

The experience of Latvia and Lithuania shows that housing prices continue to rise even in low-inflation environments, while Croatia recorded double-digit growth despite high interest rates. This confirms that long-term price movements are driven primarily by income levels, economic performance, and supply, rather than by the currency change itself.

Impact of the Euro Adoption

The currency switch will largely be a technical process, as nearly 95% of mortgages are already in Bulgarian lev, which will be automatically converted at the fixed rate of 1.95583.

For 2026, Bulgarian banks expect to maintain current reference interest rates, which are tied to the domestic deposit base. Gradually, some loans may become indexed to European benchmarks (EURIBOR, ˆSTR), leading to a slow convergence of interest margins with Eurozone levels.

Mortgage rates in Bulgaria remain among the lowest in the EU, currently ranging between 2.19% and 2.80%.

The experience of the last three countries that joined the Eurozone—Croatia, Lithuania, and Latvia—shows that the introduction of the euro does not trigger a sharp jump in housing prices. Eurostat and European Central Bank data reveal a one-off, limited effect concentrated in the first month after the switch. Throughout the first year, market dynamics were driven by more substantial factors: incomes, interest rates, and supply.

The transition may cause a brief administrative or psychological adjustment in transaction timing, but not significant price volatility. The market is expected to absorb the change smoothly, without structural shocks.

Who will drive the market?

The primary engine of the housing market will continue to be Bulgarian households, supported by rising incomes and low interest rates. The most active buyers will remain those with higher earnings, including a considerable number of public-sector employees whose salaries increased significantly.

Buy-to-let investors will also stay active in Sofia, Varna, Plovdiv, Burgas, and major resort areas. Bulgarians working abroad—as well as foreign buyers—will benefit from easier access and greater transparency thanks to the euro, making cross-border transactions smoother and more convenient.

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