After Schengen: How Free Movement Will Reshape Bulgaria’s Real Estate and Financial Markets

As of January 1, 2025, Bulgaria officially joined the Schengen Area, removing land border checks and opening new horizons for the free movement of people and capital. While for many citizens this is a long-awaited step towards full European integration, experts are already forecasting significant changes in real estate and financial markets.

Real estate market: the new hotspot for investors

Data from Q1 2025 shows an 18% increase in property prices in Sofia, with an average of €2,080/m². Coastal and mountain regions are also experiencing growing demand from foreign buyers, particularly after visa procedures were simplified.

Foreign investors, attracted by “Golden Visa” programs, see Bulgaria as a gateway to Schengen and a convenient base for business and residence. Banking experts predict a new influx of euro investments, which could boost liquidity but also raise the risk of property bubbles.

Who benefits?

The main beneficiaries of Schengen integration include:

• Property owners and construction companies, already reporting record profits.
• The banking sector, expecting increased deposits and credit activity.
• Foreign investors, enjoying a stable framework for capital flows.

Who might lose?

On the other hand, socially vulnerable groups and young families may face challenges:

• Local buyers, priced out of the market by rising property values.
• Regional municipalities, dealing with new demographic pressures.

There are concerns that soaring demand and foreign competition could deepen inequalities across social layers.

Euro investments and tax competition

With Schengen and euro adoption, Bulgaria is becoming increasingly attractive to capital. The government is considering new tax incentives to lure companies, but economists warn about the dangers of a “tax race” in the region.

Possible scenarios

Scenario A: Sustainable growth

With proper price controls and prudent capital management, Bulgaria could emerge as a preferred investment hub in Southeast Europe.

Scenario B: Real estate bubble

If price growth outpaces economic fundamentals, a market crash and loss of investor confidence could follow.

Scenario C: Social tensions

Escalating property prices could trigger discontent among local residents and intensify political debates about regulatory measures.

Conclusion

Full Schengen membership is undeniably a historic milestone for Bulgaria. The key question is whether the country will turn this into long-term economic success or face new social and market challenges.

Disclaimer:
This article is an analytical review by the BurgasMedia editorial board and reflects the opinion of an expert group based on current political, economic, and social developments.
The conclusions presented are not predictions or factual statements, but a hypothetical interpretation of possible scenarios.
The publication is not responsible for any discrepancies with future developments and encourages readers to form independent judgments based on verified sources.