Poland was the top property investment hotspot in the first quarter of 2007, according to an investment tracker.

Property investment specialist Assetz -- which charts house price growth in Britain and overseas on a quarterly basis -- said investors in the Polish property market had enjoyed a massive 165 percent total return on cash invested in the first three months of the year, Reuters reported.

That was underpinned by capital growth of 33 percent, and Assetz said economic growth in some of the newer European Union members would continue to drive property prices higher.

Stuart Law, managing director of Assetz, said: "Poland looks set to lead the pack of emerging markets this year, with strong capital growth and excellent local demand, as well as foreign investment.

"Warsaw's property prices remain amongst the lowest in Europe and the introduction of major industry to the city is attracting an increasingly young and wealthy population.

"I expect to see continued strong growth and a flourishing rental market."

Germany showed the lowest returns during the past three months, but Assetz said that after 15 years of stagnation the Berlin property market was finally starting to stir as big business arrived, attracted by low start-up costs and cheaper office space than in Munich and Frankfurt.

Capital price growth rose to 0.6 percent in February from 0.2 percent in November, after years of decline, the figures showed.

British buy-to-let, Bulgaria and France gave the next highest returns on cash invested -- between around 50 and 60 percent -- in the first quarter.

However, Assetz said the rental market in Bulgaria remained "fairly risky", with mortgage interest rates having risen to 6.75 percent from 6.5 percent and average yields of just 5 percent.

Most of the recent growth had been in peripheral locations where prices are catching up with the tourist hotspots, it said.

But while country-wide capital growth for 2006 came in at 17.3 percent, more popular locations have not fared as well: the capital Sofia and ski-resort Bansko district saw property price growth of just 9.8 percent and 5.3 percent respectively.

Law said those who took a long-term view could still do well in Bulgaria if they accepted short-term income losses.

"Bulgaria, South Africa and Spain are likely to face a slowing in the rate of growth during the next few months, but are still a long way off from falls in house values," he said.

Investors in the U.S. should also take a long-term view, he said, on the back of "shaky" mortgage activity and a weak dollar.

Capital growth has dropped to 7.7 percent from 10.1 percent over the past three months and Law said better buying opportunities were likely to arise in the States over the next year or so, as the market was likely to fall further.

The tracker assesses current costs, projected returns and risks associated with investing in property in the following countries: France, Spain, Southern Cyprus, Florida, Bulgaria, Portugal, Poland, Italy, Greece, Turkey, Northern Cyprus, South Africa, UK student accommodation and UK buy-to-let.