After a period of high inflation, double-digit growth in housing prices, and strong external shocks, the Bulgarian economy is gradually transitioning to a more moderate but sustainable cycle. Forecasts for annual GDP growth of around 3%–4%, holding the housing price index in the zone around 230–260 points, and stable activity in construction suggest a "slow but healthy" growth scenario until 2028, without the excesses of previous real estate waves.
GDP: growth of about 3%–4% annually as the new normal
Macroeconomic forecasts for the 2026–2028 period outline a relatively stable trajectory for the Bulgarian economy. Base scenarios from international institutions and local analysts are concentrated around real growth of 3% annually, with the possibility of approaching 4% if the external environment is more favorable. This places Bulgaria in the group of countries with moderate catching-up relative to average EU levels.
Growth is driven mainly by domestic consumption—supported by rising wages and low unemployment—and by investments in infrastructure and construction. At the same time, the economy remains sensitive to external shocks: the dynamics of interest rates in the Eurozone, energy prices, and the general economic climate among main trading partners can shift the actual result within a range around the central point of 3%.
Growth of 3%–4% annually does not mean an economic boom, but rather a stable, predictable environment. For businesses, this provides an opportunity for longer-term planning, and for households—a gradual increase in income, which serves to catch up, albeit not completely, with the accumulated price increases of recent years.
Housing price index: stabilization on a high plateau
The housing market remains a key indicator of the state of the economy and household sentiment. After double-digit annual increases in the 2021–2023 period, the housing price index reached record values and, at the end of 2025, is moving around 250–260 points relative to a base level of 100. Forecasts for the coming years are more moderate: expectations are for the index to remain approximately in the 230–270 point range, with a slightly upward movement.
In practical terms, this means that the market is entering an "expensive but predictable" mode. The big jump in prices has already occurred, and in the near future, the probability of a new wave of double-digit growth appears lower. Instead, more moderate appreciation is expected—on the order of 5%–8% annually in major cities—which will keep the index near its current peaks without significantly exceeding them.
It is important that this stabilization is happening against the backdrop of a real decline in inflation compared to peak years. This makes the index levels even more significant: even with lower general inflation, housing retains its high value, which increases the burden for new buyers entering the market—young families and first-time homebuyers.
Prices, transactions, and buyer profile
The market structure in 2026 shows a clear shift away from the "panic" buying that dominated previous years. Buyers are becoming more selective—they compare offers, negotiate actively, and look for a better balance between price, location, and construction quality. This cooling of euphoria leads to a more normal pace of deal execution and more realistic valuations from sellers.
In major cities—Sofia, Plovdiv, Varna, Burgas—a positive price trend is maintained, but with a clear distinction between sought-after and oversaturated areas. Housing with good transport access, proximity to education and healthcare, high quality of execution, and energy efficiency retains its premium. More peripheral and compromise locations are feeling stronger pressure toward price renegotiation.
There is also a significant change in the motivation for purchasing. The share of buyers purchasing "for themselves" is gradually increasing at the expense of purely investment deals aimed at resale or short-term gains. Investor interest is reorienting toward better-calculated projects—properties with good rental yields, opportunities for flexible use (home + office), or areas with predictable infrastructure development.
Construction: between high costs and sustainable demand
The construction sector continues to play the role of one of the main drivers of GDP. By the beginning of 2026, most of the projects started during the real estate boom are being realized according to plan, albeit under pressure from higher costs for materials, labor, and financing. This maintains high employment in the sector and multiplies the effect to related industries—production of construction materials, transport, services.
At the same time, new investment decisions in construction are being made significantly more cautiously. Bank financing is more selective, investors avoid risky locations and overly large projects without clear advance demand, and regulations and requirements for energy efficiency and sustainability increase initial costs. These factors simultaneously limit the risk of oversupply and maintain the price level of quality projects.
A gap between "mass" and "quality" construction is beginning to emerge in the market. While standard projects compete for clients through price, the higher segment relies on technological solutions, lower maintenance costs, good location, and amenities—factors that are becoming increasingly important to buyers at high general price levels.
Risks and possible surprises
Despite the relatively calm-looking base scenario, several potential risks face the Bulgarian economy and the property market. At the macro level, these are a possible sharper slowdown of the European economy, a new wave of geopolitical tension, or a faster-than-expected tightening of monetary policy, which would make financing for households and businesses more expensive.
At the micro level, the development of the labor market could also have a significant impact—if wage growth lags persistently behind housing prices, the affordability of properties for young people will deteriorate, which will limit demand and could lead to stagnation in individual segments. An additional factor is demographic trends: a shrinking population and internal migration to a few large centers will intensify the division between "winning" and "losing" regions.
Still, the dominant expectation is for a scenario of gradual cooling rather than a sharp correction. Growth of 3–4% annually, a housing index in the corridor around 230–260 points, and an active but more selective construction sector form a framework of predictability in which what becomes key is not the "right moment," but the "right decisions"—for households, investors, and the state itself.