Residential property prices in Bulgaria’s large cities are expected to increase 10 per cent by the end of 2007, predictions of real estate agency ERA Bulgaria show.

Residential property prices in Sofia went up 16 per cent in the first quarter of 2007 and those in Varna 18 per cent as compared to figures for the last quarter of 2006, ERA managing director Teodora Dimitrova said as quoted by investor.bg.

For the same period, vacation property prices at the Black Sea and winter resorts increased 22 per cent.

The average price growth for the first six months of 2007 reached 25 per cent in some of Bulgaria's bigger towns. Mladost and Vuzrazhdane residential district in Varna and some regions of Sofia saw 25 per cent increase, Dimitrova said.

The average price growth of new construction in Sofia's residential district of Mladost reached 15 to 20 per cent.

The figures exceed expectations for a slight increase of residential property prices in Bulgaria after its EU accession.

Fast development of the mortgage market and high demand for ready apartments feature among main factors that influenced the dynamic price increase in the country, Dimitrova said.

Bulgaria continues to be EU’s cheapest country concerning residential property prices. The average prices in European capitals vary between 150 000 and 200 000 euro. In Sofia, the average price of a 60 to 70 sq m apartment varies between 70 000 and 80 000 euro.