Reuters news agency warned property investors of the risks related to purchases in Bulgaria. According to the report market growth has started going down and competition in the country was on the rise.

Recently annual returns went down to 44 per cent as compared to the 104 per cent three months ago, Reuters reported.

Price growth also started slowing down. The levels went down from 36 per cent to 17.8 per cent, the report said. In the Bansko winter resort area prices registered a 2.1 per cent decrease.

In the second quarter of 2006 overall price growth in Bulgaria reached 1.6 per cent. Oversupply led to 'fierce competition for rentals', Reuters reported.

After a huge initial boom the Bulgarian property market was now re-adjusting, agents said. Instant returns could no longer be made, though long-term investors could still expect to benefit in the coming five to ten years, the report said.