Bulgaria a top property investment

In a report sure to fuel debate, Bulgaria is listed as the top performing market in the latest Knight Frank Global Price Index. Bulgaria’s prices jumped 30.6 percent in the quarter ended in September, despite “numerous concerns over the level of oversupply” in resort areas, the property company says.

While many industry experts see Bulgaria as over-hyped, Knight Frank’s numbers suggest that the country is dramatically out performing the rest of Europe.

“In Western Europe the previous boom regions have come back to Earth with a bump,” the report found.

Overall, global price growth is slowing—an 8.2 percent increase in the quarter compared to a 9.6 percent bump a year earlier—a trend Knight Frank attributed to rising interest rates and tightening credit.

Some other noteworthy tidbits from the report:

* After dominating the index in recent years, Latvia and the Baltic countries have come back to reality. Lativia, which posted a 56.9 percent price jump in the third quarter of 2006, saw a more reasonable 10.2 percent increase in the same quarter of 2007.

* Singapore was the second best performing market in the quarter, posting a 27.6 percent increase. Hong Kong, which was sliding a year ago, recovered with a 9.9 percent jump in the latest quarter. In Asia-Pacific, only Japan showed negative numbers.

* Ireland saw prices dip after a 15 percent increase in the same quarter a year ago, suggesting that the market is, in fact, going through the oft-reported correction. Despite “negative press,” the U.K. posted a “robust” 11 percent increase in the quarter, which most likely doesn’t reflect the recent downturns reported by other agencies.

* South Africa placed third in the index with a 14.4 percent increase in the quarter. “Demand for coastal property remains strong with price inflation in most coastal locations significantly exceeding the national average,” the report says. But Knight Frank warns the market is expected to slow due to tighter mortgage lending rules.

* Much-discussed Spain saw prices increase 5.3 percent for the year, down from a 9.7 percent jump a year earlier. Although the results suggest the market is continuing to slow, as many believe, the report notes the growth is “a considerably more sustainable rate” than the 20 percent increases of a few years ago.