The number of real estate transactions in Bulgaria in 2006 rose by about 15 per cent, to nearly 280 000, Bulgarian news agency BTA reported on January 22. This placed Bulgaria sixth in the world in volume of foreign investment in real estate. This is a major indicator of the development of the market, Address real estate company chief executive Katia Tsenova said at a news conference on the same date.

In another observable trend, the number of Russian buyers in Bulgaria doubled last year. Most of them are buying upscale properties in the central part of settlements on the Black Sea. Buyers and sellers seem to have changed their criteria for "expensive".

Last year 300 000 euro sounded reasonable for a top-notch apartment, while a year before 150 000 euro was a top price. The market was influenced by the country's accession to the EU from January 1 and people had the mindset that property prices would hike with Bulgaria's EU entry. In the last days of December 2006, selling offers were withdrawn while demand went high. The overall increase of housing prices across the country was 12.07 per cent last year, to 624.83 euro a sq m from 557.53 euro a sq m. Among large cities, the increase was highest in Plovdiv, 13.66 per cent, largely due to a shift of investors' interest away from the saturated market in the capital to the second largest city, according to Address real estate. Prices in Sofia went up 12.53 per cent and in Varna 10.33 per cent.

The bulk of property transactions last year involved housing. Demand was highest for one-bedroom apartments but supply was slim, pushing the price up by nearly 15 per cent. The majority of buyers were in the 26 to 45 year age bracket. Deals using a bank loan rose by 40 per cent from the year before.

The farmland market also showed signs of development last year. In most transactions, investors bought land to build on it. Further development of this market segment is strongly impeded by the fragmentation of the land plots.

The expectations for this year include further increase of prices, within the range of 10 to 15 per cent. The increase will be steepest for luxury housing properties. Supply in the large cities will outpace demand, because of ongoing large-scale construction of new housing. Heightened interest is also expected for office and industrial buildings, Address said.