Bulgaria was the world's strongest property market in 2007 with an estimated turnover of 11.36 billion euro, an increase of 2.36 billion euro over the previous year, British property investment company Obelisk said on February 1.

The previous lack of modern apartments, retail, and administrative buildings, as well as growing investment in tourism, production, and the need for modern infrastructure caused the construction boom.

Construction sector growth is expected to be between 12% and 16% year on year until 2010, Obelisk said in a statement.

The huge property price rise has been largely attributed to a good mortgage market, high annual revenue of properties and the weak impact of the global credit crunch on Bulgaria, since there is virtually no cross-border banking in the country.

Britons accounted for 40% of all Bulgaria property investment in 2007, followed closely by Russians with 38%, and "played a primary role in maintaining excellent market conditions (...) and adding to the robust appeal for Bulgaria property investment," Obelisk said.

Bulgaria's decision to slash taxes to a flat 10% starting from this year makes the country a very tax efficient place to relocate or invest in, according to Obelisk, while budget airlines' plans to increase the frequency of their flights would make traveling to and inside the country easier.

"Despite such rapid price growth, Bulgarian property investment remains very competitive and highly profitable in comparison with other European markets, giving the country a long-term profitable investment edge," the British firm said.