Bulgaria has been named the best destination for overseas property investment, even though its tourist hotspots are showing signs of overheating, according to a new research.

UK ranks as the best for investment returns with Bulgaria second, says the quarterly investment tracker, released by British investment firm Assetz. Making up the rest of the top five are Canada, Cape Verde and Cyprus respectively.

Bulgaria maintains a strong position in the tracker with a total of 71% return on cash invested, but Assetz advised caution to investors, especially in the tourist hotspots such as Sunny Beach and Bansko where there is a severe oversupply of apartments.

Local agents are reporting a lack of demand resulting in weak rental yields being achieved and the resale market is still unproven, the company said.

However, average prices have increased from 17.3% to 22.5% annually in June 2007, possibly due to a number of ‘prestige' developments coming onto the market.

Assets commented that the rate of growth in many countries, such as Poland and Bulgaria, could not continue at a rate of 20 - 30%, and a reduction to a more stable and realistic rate of growth was necessary.

UK investment firm Assetz has advised caution to investors, especially in the tourist hotspots such as coastal Sunny Beach, where there is a severe oversupply of apartments. Photo by Yuliana Nikolova (Sofia Photo Agency)

More news from Bulgaria - http://www.novinite.com/