The issuance of building permits is slowing down in early 2026.

Growth in the number of building permits issued in Bulgaria is slowing in the first quarter of 2026, according to data published this week by the National Statistical Institute (NSI). According to the data, the year-over-year increase is 10.5%, which is lower than the 14.3% growth recorded during the same period in 2025.

Data on building permits and housing starts are among the key indicators of the state of the economy and economic activity, along with retail sales and business investment in new plants and machinery. They serve as a gauge of economic activity and can provide early signals of business sentiment – whether toward investment or saving.

This decline comes amid the first signs of a shift in the real estate cycle, particularly in Sofia. Experts are already noting signs of a “reversal” in the market – from a shortage to a potential oversupply in certain areas of the capital.

Analyses of supply and demographic trends show that, for the first time, new construction is beginning to outpace the actual demand for first homes, even though between 17,000 and 18,000 people move to Sofia each year.

At the same time, the cost structure in the sector is changing – the leading factor in the price of new homes is no longer construction materials, but rather the cost of land and rising labor costs. This, combined with banks’ more cautious policies and stricter requirements for borrowers, suggests that the market is entering a more mature phase.

What do the 2026 data show?

In the first quarter of 2026, local authorities issued building permits for 2,302 residential buildings containing 13,567 dwellings and totaling 1,735,449 sq. m of gross floor area. Permits were also issued for 13 administrative buildings with 6,762 square meters of gross floor area and 1,218 other buildings with 640,381 square meters of gross floor area.

On a quarterly basis, however, a decline is reported – permits for residential buildings decreased by 5.1%, the number of dwellings in them by 13.3%, and the gross floor area by 3.4%. There was also a decrease in administrative buildings (-7.1% in number and -50% in gross floor area), as well as in other buildings (-6.8% and -16.8%).

Where is the highest activity

The highest number of permits for new residential buildings were issued in the districts of Plovdiv (368), Sofia (287), Sofia-Capital (265), Varna (200), and Burgas (169).

The largest number of housing units are set to begin construction in Sofia (3,948), followed by Plovdiv (2,235), Burgas (2,018), Varna (1,200), and Ruse (591).

Construction Started

In the first quarter of 2026, construction began on 1,649 residential buildings with 10,193 housing units and 1,168,008 sq. m of gross floor area. Construction also began on 11 administrative buildings with 8,881 square meters of gross floor area and 594 other buildings with 355,460 square meters.

Compared to the previous quarter, the number of residential buildings decreased by 7.5%, but the number of dwellings in them increased by 11.1%, and the floor area by 0.4%. Administrative buildings saw strong growth—83.3% more projects started and a 196.1% increase in gross floor area.

Strong annual growth in projects started

On an annual basis, residential buildings started increased by 15.2%, the number of dwellings in them by 67.4%, and the gross floor area by 58.1%. For administrative buildings, the number is decreasing, but their floor area is increasing, while other buildings show mixed trends.

The highest construction activity in terms of projects started is in Plovdiv, Sofia, and the Sofia region—areas that traditionally account for the largest share of investment in the sector.

Translated with DeepL.