Foreign individuals and companies with foreign shareholders bought real estate worth EUR 310 M in the first three months of 2007, Bulgarian National Bank (BNB) data shows.

The figure is a 63% increase over the same period of last year, when foreign buyers paid EUR 190 M for real estate in the country.

Real estate buys accounted for nearly 40% of all foreign direct investment in January-March, helping offset flagging inflows, according to the BNB figures.

Bulgaria has attracted foreigners for years with its warm climate, seaside and winter resorts and relatively low-priced properties, but interest grew into a boom last year.

Foreigners spent a total EUR 1,13 B on Bulgarian real estate in 2006 and are set to spend even more this year, although overconstruction is turning some of them off.

Brits remain the driving force of the boom and paid, as a whole, more than anyone else to buy houses in Bulgaria, focusing on seaside properties and accounting for 16,4% of the total money spent.

Luxembourg and US follow in the rankings, with 11,3% and 9,2% respectively, while neighbouring Greeks spent 7,0% of the total sum, buying predominantly properties in southwestern Bulgaria.

Ireland, Hungary and Spain each accounted for more than five percent of the money spent by foreigners on real estate buys in Bulgaria.

Bulgaria joined the EU in January, but that had no effect on the market, as foreigners could buy real estate long before the accession, with the exception of the land itself.