Russian investors pay up to 500 000 euro a sq m for construction plots near Varna, Bulgaria's largest seaside city.

Standart newspaper quoted Dimitrina Ouzounova from Address real estate agency as saying that the Russians were mainly interested in constructing resort complexes, hotels and apartment buildings. The buildings were usually sold before the end of the construction work.

Until recently British were the biggest group of foreign property buyers, but Bulgarian property market tendencies show a steady growth if Russian investment. The British were mainly interested in property worth less than 80 000 euro, whereas Russians would spend 250 000 euro on more luxurious property, Standart said.

Because of the high demand, real estate prices have increased by 25 to 30 per cent since last summer. The increase is also due to the expected deficit of construction areas near beaches. Property owners and real estate agencies expect another price hike after Bulgaria's EU accession in 2007.