Property prices in Bulgaria were so low it was impossible to make losing investment in the country’s real estate sector, International Herald Tribune reported.

At the same time property prices are constantly on the rise.

In one year residential property prices went up 36.6 per cent, data of the National Statistical Institute shows. Prices are still much lower than the value of similar property in other Central and East European countries, like Slovakia, Romania and the Czech Republic.

West European property seekers are mainly lured by the opportunity to purchase a cheap vacation house in Bulgaria. A smaller number of foreigners look for property investment opportunities in the country, IHT reported.

Foreigners are involved in 23 per cent of the real estate deals concluded in the country in 2005.

Real estate turns out to be Bulgaria’s fastest-growing economic sector, data of the national property association shows. International analysts, however, said that foreign investment was not the driving force behind the development. Domestic growth played the major role, IHT said.

Interest is also on the rise because of Bulgaria’s expected EU entry. Construction costs, prices and property revenue are all expected to increase once Bulgaria becomes member of the union, IHT reported.