One question has come up in our office almost every week since the start of the summer: if transactions are falling, when do new-build prices follow?
The answer sits in a statistic that rarely makes the property headlines — the construction cost index. It does not measure what a home costs to buy. It measures what it costs to build. And in the second quarter of 2026, that index accelerated again.
The figures below are from the NSI and Eurostat, verified as of September 2026.
The overall construction cost index rose 3.4% against the first quarter of 2026 and 9.6% year-on-year, reaching 230.82 points against a 2021 base of 100.
By component:
| Component | Index, points | vs Q1 2026 | Year-on-year |
|---|---|---|---|
| Overall index | 230.82 | +3.4% | +9.6% |
| Construction materials | 248.32 | +3.4% | +10.0% |
| Labour | 192.07 | +3.5% | +8.5% |
The two visible components are growing at almost identical quarterly rates. That matters: the acceleration is not coming from one direction only — it is neither a pure materials shock nor a pure wage shock.
The precise contribution of each component cannot be derived as a simple average, however. The NSI aggregates on weights and separately includes electricity, which is not published as a standalone line. We therefore stay with what the data states rather than building our own arithmetic on top of it.
The longer series explains more than a single quarter does.
| Year | Overall index | Materials | Labour |
|---|---|---|---|
| 2022 | +54.9% | +73.1% | +11.6% |
| 2023 | +15.5% | +16.7% | +12.9% |
| 2024 | +4.6% | +0.5% | +20.9% |
| 2025 | +11.8% | +9.8% | +18.1% |
Average annual changes, NSI data.
2022 was a materials and energy shock. 2024 was the reverse — materials effectively froze while the pressure shifted to wages. 2025 and Q2 2026 mark a third phase: labour stays expensive and materials are accelerating again.
Against end-2019, the overall index is now 156.3% higher, materials 178.1% higher and labour 108.7% higher.
This is the caveat without which the numbers are read wrongly.
The index covers input prices — materials, electricity, labour. It does not measure:
And 230.82 points does not mean a 230.82% increase over 2021. It means a 130.82% increase over the base-year average.
Put plainly: a high index does not guarantee that any given apartment will get more expensive. It shows where the floor is — the level below which a builder cannot go without working at a loss.
Q2 2026 is not an isolated episode. According to Eurostat, between 2015 and 2025 the price of constructing new residential buildings rose fastest in Bulgaria — by 166.1% — ahead of Hungary (+155.4%) and Romania (+130.7%). The EU average over the same period was +48%.
In other words, building a home here became more than three times more expensive than the EU average over a decade. For reference, the EU construction producer price index for new residential buildings stood at 126.3 points in Q1 2026 (2021 = 100), up 1.3% on the quarter.
Meanwhile construction activity in Bulgaria remains in positive territory. In June 2026, construction output rose 0.9% against May and 4.4% year-on-year, while the euro area contracted 0.7% year-on-year and the EU grew by just 0.2%.
It is an unusual combination: a sector producing more than the European average, on input costs rising faster than the European average.
Three conclusions we think the data supports.
1. The expectation that new-builds will get cheaper has no support in the cost base. Transaction volumes are down — we covered the first half of 2026 in detail in our H1 market report. But fewer transactions do not lower the price of concrete, glazing or labour. The discounts that appear in a softer market come from the resale segment and from overpriced listings, not from new projects at an early stage.
2. In new-builds, the discount comes from the stage, not from the price per square metre. With costs rising, a developer has a stronger incentive to sell early in order to fund construction. So the gap in terms between Act 14 and Act 16 remains wider than any discount on a completed building — along with the risk you take on. What each stage actually means is set out in our guide to Act 14, Article 181, Act 15 and Act 16.
3. The second budget is rising too. The materials index applies to your renovation, not just to the building's structure. If you buy at shell stage, the finishing works are priced at today's material and labour costs, not those of two years ago. A realistic estimate of what remains after the notary is in our guide to the second budget.
The other side of the same numbers is good news for owners of well-maintained older homes. When each new square metre becomes more expensive to build faster than the EU average, the price gap between new-build and good-quality older stock narrows more slowly than many sellers expect.
That is not an argument for raising the asking price. It is an argument against panicking after two or three weeks without a viewing.
When we value a property in a building under construction, we do not take the developer's price list as a given. We check the construction stage against the schedule, the payment regime against work actually completed, whether the preliminary contract contains a price-indexation clause, and what exactly "finished to BDS standard" covers. With costs rising, indexation clauses are precisely where buyers most often take on risk without realising it.
For resale sellers we use the same data in the opposite direction — to show, in numbers, why a particular apartment does not compete with new-build on price, but on move-in date and on the cost of finishing.
In Q2 2026 construction costs rose 9.6% year-on-year, with materials adding 10% and labour 8.5%. Against end-2019 the overall index is more than 156% higher. Over a decade, Bulgaria has had the fastest-rising residential construction costs in the EU, and its construction output keeps growing while the euro area contracts. The index does not measure the final price of a home — but it sets the floor underneath it, and that floor is rising.
If you are considering an off-plan purchase, or selling a property and want to understand how these figures apply to a specific building, call us or come by the office. We will look at the project, the stage and the contract, and tell you what they actually mean for the price.
NSI data (construction cost indices, second quarter of 2026) and Eurostat data, verified as of September 2026. Indices use 2021 = 100 as the base. Market conclusions are indicative and change with each new quarter.
