The investment in property is not as profitable as it used to be, an Industry Watch report shows.

Investment in Bulgarian property fails to bring the same material returns, Dnevnik newspaper reported. Other economic sectors take the lead in investment returns. Among these investments are ones in crude resources like petroleum.

Property prices increased on the average with 21.6 per cent between December 2004 and December 2005. Currency investment in US dollars is the only one that brought smaller increase of 13 per cent, the Industry Watch report shows.

The high construction rate remains constant. Construction works are highly focused with two thirds of the new constructions appearing in five major cities. Bourgas remains the city with highest number of construction permits, followed by Sofia and Varna.

Average property prices in Sofia are expected to stabilise due to the increasing supply. The first signals of such developments already became evident in several property market segments.

Faster growth rate is expected in smaller cities, which remained underestimated for a long period of time. At the same time a migration from smaller to bigger cities is still observed in Bulgaria. As a result a number of small cities become uninhabited.