The Bulgarian construction industry has experienced unprecedented growth. Data released in May by the National Statistical Institute (NSI) show steep growth curves for completions in both residential and non-residential construction. While the 45,3% increase in residential construction can be partly attributed to the reporting of construction projects from previous years, the foundation of the upswing is nonetheless real: Driven by the ongoing integration into the Eurozone, many Bulgarians turned to tangible assets, causing real estate prices to rise by over 15 percent at times. Local buyers’ purchasing power was bolstered by rising real wages and favourable mortgage loans. Mortgage interest rates in Bulgaria have shown an unusual trend, remaining at a historic low compared to the rest of the EU. While interest rates in the rest of the eurozone rose sharply in the wake of the central bank’s tight monetary policy, Bulgarian construction loan rates remained below the 3 percent mark for a long time due to extreme liquidity in the local banking sector.
Non-residential construction is also showing a similarly positive trend, though it follows entirely different market dynamics. There is no sign of a widespread boom here—the sector is sharply divided. While traditional office construction experienced a hard landing following the end of the IT and outsourcing hype, and permits for new office space plummeted, demand for logistics and industrial real estate is exploding. Bulgaria’s accession to the border-free Schengen Area and the ongoing trend toward “nearshoring”—the relocation of production facilities back to Europe—have made the country a sought-after Eastern European logistics hub. Supported by robust government infrastructure investments and EU funding for civil engineering, commercial and industrial areas around major cities are recording double-digit growth rates. While Bulgaria’s construction sector is thus growing unevenly,
Against this backdrop, a cooling off and normalization of market activity is expected again for 2026. The phenomenon of “panic buying,” in which buyers acted impulsively out of fear of price increases following the introduction of the euro and due to historically low interest rates, is over. The market is shifting from a phase of overheating to a more stable, rational cycle. Accordingly, B+L’s forecasts in the middle term are cautious for now.