On 1 January 2026, Bulgaria became the 21st member of the euro area after almost 30 years of having its currency pegged first to the Deutsche Mark and later to the euro at a fixed exchange rate. The transition heavily affected residential construction, which recorded its highest-ever number of completed buildings and dwellings in 2025. Several factors drove this outcome: widespread concerns about price increases following the currency changeover, existing inflationary pressure, favourable financial conditions, and a considerable volume of cash that needed to be invested quickly.
"Can we already estimate what the immediate effects of Bulgaria's euro adoption are on the residential construction of the country? This is one of the most frequently asked questions we try to answer almost on a daily basis in our talks to construction companies in Bulgaria. And the short answer is, probably yes. The longer one is, it depends on which data we look at and their latest availability," said Yasen Georgiev, EECFA's Bulgarian researcher at Economic Policy Institute.
Since the currency changeover, quarterly data releases on the residential segment have attracted public attention. Home transaction figures for January to September 2026 show a clear downward trend, with the pace of decline accelerating. In Q3 2026, 45,312 property sales were registered, 22% fewer than the 58,184 recorded a year earlier. The annual drop stood at 18% in Q2 2026 and at 15% in Q1 2026.
Data on construction permits, starts and completions present a more nuanced picture. Measured by floor area, permits rose by 33% in Q1 2026 and by 4% in Q2 2026 on an annual basis, while started area grew by 58% and 9% respectively. Completed floor area, however, contracted by 44% in January to March 2026 and by 24% in April to June 2026, suggesting that peak performance across these categories may have passed.
Against this backdrop, new housing loans continued to grow. According to Bulgarian National Bank data, their volume in August 2026 was 21% higher than in the same month a year earlier, supported by continuously low interest rates. Georgiev cautions that drawing firm conclusions on the implications of euro adoption for residential construction remains premature, and that EECFA will publish a clearer assessment in its winter construction forecast report on 8 December 2026.
