A Moment For Hunkering Down

At the peak of Sofia's housing boom in 2006 speculators were slapping deposits down on 10 off-plan Sofia apartments and doubling their money by selling them before they had even been built.

Now prices in Sofia and Bourgas are sliding and Varna's property market is topping out, leaving late investors with burnt fingers and raising fears that the housing slump could trigger a wider economic "hard landing".

The property markets of the Balkans states, like their economies, have boomed so spectacularly because they are tiny and there was so much pent up demand to move out of grim communist-era tower blocks. Easy credit from banks fighting for market share, as well as rapidly rising wages - up by more than 30 per cent last year in Bulgaria - merely lit the touch paper.

As always, Plovdiv in Bulgaria - the next bigest and most picturesque of the four major cities in Bulgaria - followed Sofia, Bourgas and Varna. A typical price for a renovated apartment in Plovdiv's medieval old town is now about €800 per sq m.