site.btaHousing Prices Expected to Increase by 5%-8% in 2026

Housing prices are expected to increase by between 5% and 8% in 2026. On the one hand, this will be due to a more moderate market that is expected to emerge over the next 12 months. On the other hand, lending will be stimulated as a result of the reduction in banks’ mandatory minimum reserve requirements. This is expected to give an additional boost to housing transactions, according to a forecast by the Imoteka real estate company, received on Monday by BTA.

“Following Bulgaria’s accession to the eurozone, the rate of banks’ mandatory minimum reserves will be reduced from the current 12% to 1%. This will free up resources to provide additional mortgage lending,” said Yavor Peychev, Executive Director of Imoteka, as quoted in the press release.

According to Peychev, in 2026 we will witness moderate supply and demand. Even if supply increases, it will not outpace demand, as there is no expectation of lower incomes; on the contrary, buyers will increasingly seek to improve their quality of life. The main demand in the first six months of the year will be for owner-occupied housing, with a focus on two-room and three-room apartments.

What happened in 2025?

The past year, 2025, can be described as a year moving at three different speeds, according to the company. From the beginning of the year until May–June, buyers were active but careful in their choices. Some thought carefully before determining what kind of property they needed to best meet their housing needs. Others invested funds in properties under construction with the aim of resale and profit. A third group took advantage of the moment to acquire houses in suburban areas and within 40 km of major cities, especially around Bulgaria’s four largest cities, the analysts note.

During the summer, the second stage of the market’s development over the year began, according to Imoteka, which they describe as a peak period due to the news of Bulgaria’s adoption of the euro. Inquiries recorded by Imoteka demonstrated record-high levels, the company says.

Since September, potential buyers have slowed their activity—inquirires to the agency were between 15% and 25% lower. Against this background, however, transactions did not decline and even registered growth, according to Imoteka.

“The market has filtered out those consumers who were mostly just looking around, driven by the general euphoria, without having the necessary savings. The active participants, however, people with available funds, remained on the market, and transactions continued to be concluded with the same momentum,” Peychev explained.

Prices recorded a significant increase over the year, Imoteka notes. Average prices of older-construction homes in preferred central areas of Sofia, such as the Doktorski Pametnik area, now exceed EUR 5,000 per square meter. In the Iztok area, average prices are above EUR 3,800 per square meter; in Lozenets, above EUR 3,500 per square meter; and in Borovo, around EUR 2,900 per square meter. Prices of newly built homes have also increased over the year in Sofia, and levels below EUR 2,000 per square meter are now rarely seen.