Housing Prices in Bulgaria Continue to Rise, Though at a More Moderate Pace

Capital

In 2024, real estate prices outpaced wage growth and inflation. In 2025, the market continues to develop, albeit at a more moderate pace.

"The market in the capital and major cities is now clearly dominated by sellers and property developers. Buyer demand remains exceptionally strong. This is also evident in the price levels, which since the beginning of 2025 have continued to reach new highs, although at a calmer pace," comments Nicola Stoyanov, founder and managing director of Stonehard Premier by LUXIMMO Group, for Capital – Real Estate. Investment, Architecture, Design.

In 2024, both property prices and transaction volumes reached historic highs, driven by several economic factors. The number of residential property deals last year reached 94,840, valued at nearly BGN 11.5 billion — the highest level since 2017. One contributing factor is the rise in household incomes, catching up to EU levels. Another is the easier access to mortgage loans, with historically low interest rates.

Fears surrounding the introduction of the euro in Bulgaria have also played a role, particularly concerns that it could lead to further price increases, making housing unaffordable. Sellers on the secondary market are holding back listings to avoid selling too low. Developers, meanwhile, are eager to capitalize on the consumer enthusiasm and the shortage of resale properties. Demand continues to outstrip supply, pushing prices even higher.

""Experts from LUXIMMO Group observe that in newly completed residential buildings, there are practically no units available for sale — they have been sold out during the construction phase," says Nicola Stoyanov.

"The greatest shortage is of quality homes in prestigious neighborhoods or in landmark buildings. When such high-value properties do come on the market, they are offered at excessively high prices. There has also been significant price appreciation in renovated, modernized panel-block apartments in peripheral districts. These often trade at over ˆ2,000 per square meter, with some transactions in ‘Nadezhda’ and ‘Druzhba’ reaching up to ˆ2,900 per sq.m.", he adds.

Nicola Stoyanov also notes that some sellers on the secondary market are "testing" unrealistic asking prices in hopes of capitalizing on the ongoing seller-driven euphoria. Many of Bulgaria’s top agencies are conducting aggressive and expensive advertising campaigns targeting these sellers. In this market climate, buyers are increasingly turning to properties under construction. At the early or “pre-sale” stage, prices below ˆ2,000 per sq.m. can still be found, which are considered advantageous.

It is common practice for real estate agencies to act as exclusive sales agents, especially for new developments with multiple units. However, a large portion of off-plan sales are made directly by the developers. Thus, from the brokers’ perspective, the supply appears extremely limited, which further justifies price increases.

New construction serves as a major regulator of the housing market and a key indicator of real estate values. With so many factors driving up construction costs, the expectation is that prices will continue to rise for at least the next two years. Economists from DSK Bank share similar views, predicting housing price growth of over 10% in Sofia and slightly lower in other major cities — at least through 2027.

Developers unanimously point to two main factors currently hindering residential construction in Sofia. Available land is becoming increasingly scarce, and prices or compensation demands have become prohibitively high. Additionally, municipal regulations are more stringent, making it increasingly difficult to obtain building permits. Nicola Stoyanov also lists unresolved issues with infrastructure — electricity, water, sewage, roads — or the outright lack thereof. Tougher building codes and the need for new certifications to meet EU standards, rising material costs, and sharply increasing labor and service prices all contribute to limited supply and high prices. There is also a shortage of construction workers and engineers.

It is well known that property prices typically increase during the construction process, benefiting early investors who buy "off-plan." Stoyanov notes that the “gap” between the prices of properties in very early construction stages and those in newly completed buildings with occupancy permits is widening significantly. "The difference in prices of identical units in the same building often reaches up to 40%," he says, noting that inflation over a two-year period must also be considered. This reflects the recent market, where housing prices rose unexpectedly — 16.5% in 2024, according to the National Statistical Institute (NSI). Meanwhile, the Bulgarian National Bank (BNB) reported a 4.9% year-on-year drop in construction costs in Q3, meaning developers have not needed to adjust pre-sale contracts — something rarely done and generally frowned upon by the market.

"However, for many new projects in Sofia today, off-plan prices are starting at levels close to those of completed properties with occupancy permits. At the Residential Expo 2025, organized by The City Media Group in April, offers for early-stage projects ranged between ˆ2,000 and ˆ2,200 per sq.m. In this context, buyers seeking capital gains may hesitate. It takes at least two years for a property to be completed, and it's unclear whether prices at current levels will continue to rise — or by how much," Stoyanov comments.

Additionally, the sector seems to be undergoing an internal debate about more equitable profit-sharing across the value chain. Periodic calls are made for developers to share a portion of their profits with early-stage investors who take on part of the initial risk.

"Overall, market players expect property prices to continue rising. While they do not rule out global crises — political or economic — affecting Bulgaria, this has not dampened their expectations. Properties in Sofia or other major cities are seen as a safe haven in uncertain times, an effective means to preserve capital and even increase its value in the long term," says Nicola Stoyanov.

The published article is a translation/adaptation of the original article or material from the respective cited source. According to the Bulgarian Copyright Act (Article 9), the copyright of the translation or adaptation belongs to the person who created it, without infringing upon the rights of the author of the original work.

The published article is a translation/revision of the original article or material of the relevant quoted media. According to the Copyright Act of the Republic of Bulgaria (art. 9), the copyright on the translation or revised text belongs to the person who did it without prejudice to the rights of the author of the original text. If you wish to use the information in this article, please contact the author to obtain permission.