A property boom is ‘sweeping’ Bulgaria and Romania after the two countries’ accession to the European Union (EU) on January 1 2007.

Property prices had increased more than double in the past three years the boom was expected to be long-lasting, Associated Press (AP) said. Local property demand, tourism and increasing number of foreign investors caused the boom.

Apartment prices in Bulgaria raised by and average of 15 to 20 per cent in 2006. In some parts of Sofia the increase was much higher.

Property investment return rates in Bulgaria and Romania were among the highest in Europe, AP said.

Real estate agents said that the two countries’ EU accession was “the main catalyst for growth, lending more credibility … and attracting investors.”

The property boom led to construction rates exceeding demand in Bulgaria and Romania. Nearly 1.5 million tourists visited Bulgaria’s Black Sea resorts in 2006, but many luxurious hotels remained empty. Still, investors continued building new ones.