Bulgaria was the world's strongest property market in 2007 with an estimated turnover of 11.36 billion euro, an increase of 2.36 billion euro on the previous year, British property investment company Obelisk said on February 1, cited by PropertyWise Bulgaria.

The previous lack of modern apartments, retail, and administrative buildings, as well as growing investment in tourism, production, and the need for modern infrastructure caused the construction boom.

Construction sector growth is expected to be between 12 per cent and 16 per cent year on year until 2010, Obelisk said in a statement.

The huge property price rise has been largely attributed to a good mortgage market, high annual revenue of properties and the weak impact of the global credit crunch on Bulgaria, since there is virtually no cross-border banking in the country.

Britons accounted for 40 per cent of all Bulgaria property investment in 2007 - followed closely by Russians with 38 per cent, Obelisk said.

Bulgaria's decision to slash taxes to a flat 10 per cent beginning this year makes the country a very tax efficient place to relocate or invest in, according to Obelisk, while budget airlines' plans to increase flights' frequency would make travelling to and inside the country easier.

"Despite such rapid price growth, Bulgarian property investment remains very competitive and highly profitable in comparison with other European markets, giving the country a long-term profitable investment edge," the British firm said.