Sofia Housing Market in Q1 2026: Analysis

After two years of exceptionally strong price growth, limited supply and euphoria fuelled by the expected introduction of the euro, Sofia’s residential property market entered a new cycle in the first quarter of 2026.

The period was characterised by existing demand, but also by more moderate activity, as buyers and sellers reassessed their behaviour.

The market began to change as early as the end of 2025, when the first signs of a declining transaction volume were observed. At that time, however, this was combined with accelerated price growth ahead of Bulgaria’s entry into the eurozone. In the first months of 2026, in addition to a decline in the number of transactions, we are witnessing a slowdown in the pace of price growth and an increase in supply.


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Property Prices: Growth Is Slowing Down

In the first quarter, the average price of actual transactions in Sofia stood at Ђ2,680/sq.m., according to BULGARIAN PROPERTIES. This is a slight decrease compared with Ђ2,790/sq.m. at the end of 2025, but it still represents annual growth of around 29% compared with the average price of Ђ2,080/sq.m. at the beginning of 2025.


The average final price of purchased apartments reached Ђ217,500, compared with Ђ150,000 at the beginning of 2025.

Sales Volumes: Decline Compared with the Peak Year of 2025

According to data from the Registry Agency, 7,529 transactions were registered in Sofia in the first quarter — 12.3% fewer year-on-year. These are the first figures showing a decline in transactions since 2022 and 2023. Both then and now, this decrease is largely due to peak sales levels in the preceding year and the subsequent cooling of the market.


The market is returning to a more sustainable rhythm. Buyers are more cautious, but demand remains present, while sellers are adapting to the new reality.

Housing Affordability

The rapid price growth in the second half of 2025 outpaced income growth and led to a deterioration in affordability. The affordability ratio calculated by BULGARIAN PROPERTIES — showing how many average monthly salaries are needed to purchase 1 sq.m. of residential space in Sofia — reached 1.4 in the first quarter of 2026.


Such affordability levels were typical of 2017–2018, but the current transaction volume, despite the decline, remains higher.


Bank Financing: Interest Rates Remain Low and Lending Continues to Grow

The market continues to be supported by favourable mortgage lending conditions. The average interest rate on newly granted housing loans in euro in the first quarter was 2.46%, according to data from the Bulgarian National Bank.


Euro-denominated housing loans offered by commercial banks have retained the conditions that previously applied to loans in Bulgarian lev. At the same time, the volume of newly granted housing loans to households in the first three months of the year continued to grow — by around 18% year-on-year.

Sought-after Areas and Property Types

The market clearly shows that buyers are willing to purchase where supply is available, especially in new-build properties, but they have also become highly price-sensitive. Neighbourhoods that were recently purchased in large numbers, such as Malinova Dolina and other areas with active new construction, have slowed down due to significant price increases.

At the same time, the increased supply has enabled more transactions in established and consistently sought-after neighbourhoods such as Lozenets, Iztoк, Strelbishte, Beli Brezi, Krasno Selo and others.

At the beginning of 2026, buyers of family homes with two bedrooms were more active on the market than buyers of one-bedroom apartments. This has led to an almost equal share, with a slight prevalence of two-bedroom apartments in the total number of purchased apartments in the mass segment — 45% one-bedroom and 49% two-bedroom apartments. Only 6% of purchased homes were studios.

The average size of sold mass-market homes is around 83 sq.m., with preferences focused on middle floors, from the 5th to the 7th floor.

New construction continues to dominate — around 70% of all transactions are for apartments in buildings under construction.

The remaining secondary-market transactions represent a varied mix of older brick-built and panel apartments, fully furnished apartments, as well as new homes purchased in previous years for resale. In these transactions, buyers are increasingly able to negotiate price discounts, which according to BULGARIAN PROPERTIES data reach 3–5%.


Premium Segment

In the premium new-build segment, BULGARIAN PROPERTIES achieved a substantial volume of sales in the landmark Sky Towers complex, confirming that luxury properties are more resilient during periods of market fluctuations and change.

Here, the average size of purchased apartments is 105 sq.m., while buyers prefer higher floors — where possible, from the 10th floor upwards.

Sofia’s Periphery

One of the clearest trends in 2026 is demand in the settlements surrounding Sofia. The pursuit of more affordable properties, larger living spaces and a calmer lifestyle is the main driver of this process.

The acceptable commuting radius has expanded to 30–40 kilometres. Buyers are actively looking for plots and houses in the villages around Sofia, while the success of gated residential projects such as AMur Gardens provides an additional direction for the development of supply in these areas.

Outlook: Towards Sustainable Normalisation

The continued inflow of new projects, low mortgage interest rates and rising incomes will have a positive impact and will help maintain activity, albeit at lower levels. At the same time, wars, geopolitical tensions and inflationary pressure are factors that will limit demand and keep market participants cautious.

We expect prices to continue rising, but the pace of growth will slow to moderate double-digit levels — approximately around 15% year-on-year, potentially decreasing to around 10% by the end of the year. This is the result of a combination of stable domestic demand and rising incomes, which continue to support interest in property as a secure investment. At the same time, higher prices and increased supply will cool speculative expectations.

For buyers, this means that 2026 may be a suitable year for more considered and well-informed transactions. Those who have available funds will have the opportunity to choose from a wider range of properties and locations. For sellers, we recommend aligning with current market levels and investing in the high-quality presentation of their properties, as buyers’ expectations are increasing.

In addition, BULGARIAN PROPERTIES reports that following Bulgaria’s accession to the eurozone, an increase in interest from foreign buyers has been observed, which may bring renewed optimism to the market.

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