The Bulgarian real estate market is showing signs of cooling in early 2026, with experts reporting a slowdown in transactions and a shift toward more balanced conditions between buyers and sellers. Data indicates that property deals have decreased by around 10%, while available listings have increased by more than 25%, leading to longer periods needed to close transactions.

According to real estate professionals, January and February saw a noticeable rise in new sellers entering the market, with fresh offers increasing by roughly 26%. This expansion in supply has given buyers more options and has also encouraged more careful decision-making. Industry representatives note that demand is now more selective, with purchasers spending more time evaluating properties before committing.

A key factor behind the cooling trend is the fading of the so-called ?eurozone effect.? Many buyers rushed into the market in 2025, anticipating that Bulgaria's adoption of the euro would trigger a sharp rise in property prices. This expectation contributed to earlier price increases and a wave of investment-driven purchases, which has since subsided.

Experts describe the current phase as a return to equilibrium. They argue that prices adjusted in advance of eurozone entry, leading to a temporary overheating of the market. With the initial surge of activity behind it, the sector is now moving toward a more stable balance between supply and demand.

Credit market activity has also reflected this transition. Mortgage lending recorded growth of about 14% in the early part of the year, according to banking data, partly driven by accumulated savings and delayed financial decisions during the transition period. Average interest rates remain relatively low, around 2.47%, with some new offers even below this level, keeping borrowing conditions attractive.

At the same time, sellers include both homeowners and investors, some of whom are now entering the market either to secure profits or out of concern about possible future price adjustments. Demand trends also reflect changing buyer priorities, with greater emphasis placed on living environment, infrastructure quality, and overall quality of life rather than purely investment motives.

Despite the broader cooling, certain segments remain highly priced, particularly garage spaces in Sofia. Prices range between 50,000 and 100,000 euros, with some transactions exceeding that level, driven by limited availability and strong investor interest.

Financial experts continue to advise caution in borrowing behavior, recommending that monthly loan repayments should not exceed 30% of household income, even though banks may allow significantly higher ratios. They warn that a conservative approach is preferable in conditions of economic uncertainty.