Bulgaria's Real Estate Market in 2025: Price Surge and Declining Rental Yields

Over the past decade, Bulgaria's real estate market has experienced significant growth, particularly in major cities like Sofia, Varna, and Plovdiv. However, this surge in property prices has been accompanied by a decline in rental yields, prompting investors to reassess their strategies.

Price Dynamics

In Sofia, residential property prices have skyrocketed by 200% over the last ten years, increasing from €715 per square meter in 2015 to over €2,100 in early 2025. Varna and Plovdiv have also seen substantial increases of approximately 120% and 150%, respectively. This upward trend is driven by factors such as improved financial capacity among households, favorable mortgage conditions, and a shift in buyer preferences towards modern housing complexes.

Changing Buyer Preferences

Buyers are increasingly favoring newly developed residential complexes over older, prestigious neighborhoods. Modern amenities, energy-efficient solutions, and green environments are becoming top priorities. This shift is reshaping the urban landscape, with areas like Sofia's Studentski Grad witnessing heightened demand.

Declining Rental Yields

Despite the rise in property prices, rental yields have been on a downward trajectory. As of Q2 2025, the average gross rental yield in Bulgaria stands at 4.56%, down from 4.90% in Q2 2024. In Sofia, yields are even lower, averaging 4.26%. This decline is attributed to the fact that mortgage payments are often cheaper than rent, encouraging more people to buy rather than rent.

Impact of Eurozone Accession

Bulgaria's anticipated adoption of the euro in July 2025 is influencing the real estate market. The transition is expected to boost investor confidence, reduce currency risks, and provide additional economic stability. Historically, countries joining the Eurozone have experienced increases in real estate prices, making Bulgaria an attractive destination for both local and foreign investors.