Bulgarian housing market in Q1 2026: fewer transactions, more expensive rent

According to Arco Real Estate data published on May 11 and cited by Novinite, the Bulgarian real estate market entered 2026 in a fundamentally different phase. After five years of continuous acceleration — in the first quarter of 2025, prices were rising by 15.1% year-on-year — the first quarter of 2026 brought a noticeable cooling in the number of transactions alongside an increase in supply. Buyers, according to the agency's analysts, "have become significantly more cautious and selective": they take longer to study a property, look more closely at the location and construction quality, and no longer close deals within a week.

The mortgage market, meanwhile, has remained largely unaffected. According to the Bulgarian Registry Agency, 13,706 mortgage loans were issued in the first quarter of 2026 — almost the same number as in the same period of 2025. Banks have not tightened conditions, and interest rates on euro-denominated loans stabilized at the beginning of the year in the range of 3–3.5% — one of the lowest in the EU. The Bulgarian National Bank has kept the LTV limit at 85%, which de facto protects the market from overheating through leverage.

At the same time, Bulgaria recorded a 10% increase in rental rates by the end of 2025, ranking fourth in the European Union by this indicator and seventh among all European countries. Rental growth outpaced sales price growth, squeezing yields for investment property owners: in Sofia, the current yield is around 4–5%, compared to 6% ten years ago. On the Black Sea coast and in Bansko, the picture is different — short-term rental yields during peak season still reach 11–12%.

Price growth since the beginning of 2026 has slowed to approximately 13% year-on-year nationwide, which aligns with analysts' forecasts predicting normalization after the 2025 peak. In Burgas, prices rose by almost 26% by the end of 2025, and in Varna — by more than 14%. Over the past 10 years, the overall increase in housing prices in Bulgaria has been 157%.

For a foreign investor, the current pause is the first real opportunity for negotiations in the last several years. Sellers, who until recently refused any concessions, are beginning to discuss terms. Properties in the lower price segment and older housing stock remain on the market longer. At the same time, new builds within walking distance of new Sofia metro stations, expected to open in 2026–2028, already have the infrastructure potential priced in.

Current real estate in Bulgaria — coast and cities: discount-house.com/bulgaria