The beginning of 2026 puts the construction sector in Bulgaria in an intermediate phase: after a period of strong inflation and fluctuations in 2022–2023 and a more tangible revival in 2024–2025, in April 2026 the business is already working in conditions of more moderate, but more predictable growth. The real volume of construction increases by about 3% per year, and behind these general numbers are different trends – cooling in housing construction, stabilization of prices and a more optimistic picture in infrastructure and industrial projects.
What the latest data shows: from decline to moderate growth
After slow growth and even a slight decrease in the added value in construction in 2023–early 2024, the data of the NSI for the second half of 2024 and 2025 clearly show a reversal of the trend. The construction production index on an annual basis increases by about 4–6% in key months of 2024–2025, with the most noticeable growth in specialized construction activities and civil construction (infrastructure, facilities).
In parallel with this, the costs for new housing construction, which in 2022 grew with record double-digit percentages due to the increase in the price of construction materials and energy, in 2024 are already increasing much more slowly – about 3% on an annual basis. This gives a signal that the strongest wave of price shock has passed, but the price levels remain high compared to before the pandemic, which affects the final demand.
Building permits: a signal for the next 12–24 months
One of the key indicators for future activity – building permits for new residential buildings – shows that the market has not "woken up" by chance. In the second quarter of 2025, the number of issued permits for new residential buildings increased by almost 6% compared to the same period in 2024, and the built-up area – by almost 10%. In the third quarter of 2025, the annual growth in permits reaches 8.5%, and the number of dwellings in these buildings jumps by almost 47%, which suggests that investors are again looking more boldly at new projects.
At the beginning of 2026, this wave is already materializing on the ground: active construction sites in Sofia, Plovdiv, Varna, Burgas and the larger regional centers, a concentration on one-room and two-room dwellings and the ongoing construction of houses and row houses in the satellite settlements around the big cities. Nevertheless, experts warn that the pace of new permits is likely to normalize in 2026, as part of the deferred demand has already been used.
Housing market 2026: end of panic buying, but prices don't fall
The real estate market enters 2026 with a different atmosphere: the panic buying of 2022–2023, fueled by fear of inflation and the possible introduction of the euro, is gradually giving way to more rational behavior. The analyzes for 2026 indicate a moderate increase in housing prices – between 5 and 10% compared to 2025, with the strongest increase remaining in Sofia (average values above 2300 euros/sq.m) and in the most preferred neighborhoods of large cities.
The main factors for this remain the high, albeit stabilized, construction costs, the rising wages in some sectors, as well as the expected accession of Bulgaria to the Eurozone, which supports the interest in real estate assets. At the same time, the rise in interest rates and the stricter conditions for mortgages cool part of the demand, especially for households with lower incomes. This leads to a slower realization of part of the new construction and to a stronger segmentation of the market.
Infrastructure and industry: the drivers of growth after 2025
While housing construction is stabilizing, it is infrastructure and industrial projects that are emerging as the main drivers of the sector during the period 2026–2029. Within the program period until 2027, Bulgaria has significant resources under the "Recovery and Sustainability Plan" and under the operational programs, especially "Transport Connectivity", with planned investments of the order of billions of levs in roads, railway lines and logistics infrastructure.
In parallel with this, large private projects are also being implemented – modernization and expansion of industrial capacities, logistics centers, warehouse bases, as well as investments in energy and renewable projects. The forecasts of international analyzes indicate that in infrastructure and industrial construction, the real growth can exceed the average for the sector, while the residential segment will grow more slowly.
Challenges: high costs, labor shortages and a decline in foreign investment
Despite the better numbers, the construction business remains facing serious challenges. The costs of materials and labor have stabilized compared to the peak inflation, but have remained at a permanently higher level, which reduces the margins, especially for fixed prices under contracts concluded before the price increase. The shortage of qualified workers – engineers, designers, masters – continues to be chronic, with part of the staff leaving to work in other EU countries.
An additional risk is related to the dynamics of foreign direct investment. In some years, a significant decline in new investments is observed, and investors become more cautious with regard to long-term projects in an environment of political instability and delayed reforms. This may limit the number of large private construction initiatives, especially in the office and commercial space segments, which are already feeling pressure from remote work and online commerce.
Regulations, the euro and "green" transition: what changes the framework of the sector
The construction business in 2026 is also working under the pressure of new regulatory requirements – European and national. The tightening of energy efficiency standards, the requirements for lower emissions, "green" materials and better insulation increase the initial costs, but also create new niches for companies specializing in sustainable construction. For investors, this means more complex planning, but also higher added value of well-executed projects.
The expected introduction of the euro further changes the context: on the one hand, it reduces the currency risk and can attract new investors; on the other hand – the likelihood of a further increase in property prices in the short term makes some buyers and investors "anticipate", which creates temporary peaks in activity. In the long run, however, it is the quality of the institutions and the speed of absorption of European funds that will determine whether construction will make full use of this environment.
Prospects until 2029: stable, but not explosive growth
The summary forecasts for the period 2026–2029 outline a relatively stable growth of the construction industry in Bulgaria – on average between 3 and 4% per year in real terms. The pace is expected to be higher in infrastructure and industrial projects and more moderate in residential and commercial construction. This means that the "golden years" of double-digit growth, fueled by cheap credit and a strong price surge, are behind the sector.
For the business, this is a signal to move from a strategy of "catch-up" and extensive expansion to a focus on quality, efficiency and specialization. Companies that invest in qualified staff, digitalization of processes, sustainable solutions and partnerships in infrastructure and industrial projects have the best chances to take advantage of the forecast growth. The rest risk remaining vulnerable to fluctuations in prices and demand.
Conclusion: time for a more mature construction sector
April 2026 finds the construction business in Bulgaria in a more mature phase – the turbulent, largely speculative boom of previous years is gradually giving way to more moderate, structurally supported growth. The sector can no longer rely only on "easy" residential projects in the periphery of large cities, but must position itself in infrastructure, industry, energy and sustainable urban development.
Whether construction will remain one of the pillars of the Bulgarian economy or will face a new wave of stagnation depends on three key factors: the speed of absorption of European funds, solving the problem with staff and the ability of the state to provide a predictable regulatory and investment environment. In this sense, 2026 is not just another year in the cycle, but a test of whether the sector can move from survival to sustainable development.