After 2 years of extremely strong price growth, limited supply and euphoria fueled by the expected introduction of the euro, the housing market in Sofia entered a new cycle in the first quarter of 2026.
The period is characterized by available demand, but also by more moderate activity, as buyers and sellers reconsider their behavior.
"The market changed already at the end of 2025, when the first signs of declining transaction volume were felt, but then it was combined with accelerated price growth before entering 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 rate of price growth and an increase in supply," commented Polina Stoykova MRICS, CEO of BULGARIAN PROPERTIES.
Property Prices: Slowing Growth
In the first quarter, the average price of actual transactions in Sofia was 2,680 EUR/sq m, according to the company's data. This is a slight decrease compared to 2,790 EUR/sq m at the end of 2025, but still represents an annual growth of about 29% compared to the average price of 2,080 EUR/sq m. at the beginning of 2025.
The average final price of purchased apartments reaches 217,500 EUR compared to 150,000 EUR at the beginning of 2025.
Sales volumes: Decrease compared to the peak of 2025.
According to data from the Registry Agency in Sofia, 7,529 transactions were registered in the first quarter - 12.3% less on an annual basis. This is the first data on a decline in transactions since 2022 and 2023, and both then and now this decline is largely due to peak sales levels in the previous year and the subsequent cooling of the market.
The market is returning to a more sustainable rhythm. Buyers are more cautious, but demand is there, and sellers are adapting to the new reality.
Housing Affordability: A Sense of Deterioration
The rapid price growth in the second half of 2025 outpaced income growth and led to a deterioration in affordability. The affordability coefficient calculated by BULGARIAN PROPERTIES – showing how many average salaries are needed for 1 sq m of residential area in Sofia – reaches 1.4 in the first quarter of 2026.
Such levels of accessibility were typical for 2017-2018, but the volume of transactions is currently higher despite the decline.
Bank financing: Interest rates remain low, and lending continues to grow
The market continues to be supported by favorable conditions for mortgage lending. The average interest rate on newly granted housing loans in euros in the first quarter was 2.46% according to BNB data.
The housing loans in euros offered by commercial banks retain the conditions that previously existed for lev loans. At the same time, the volume of newly granted housing loans to households in the first three months of the year continues to grow – by about 18% on an annual basis.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg