The value of homes in the coastal Varna area outpaced the residential market in the capital Sofia in Q2, said the one Bulgarian real estate agency, citing data of Bulgaria's National Statistical Institute.

The value of homes in the big cities has slowed versus the same period last year when it was rising at twice the current rate, forecasting a 15% increase in the price of luxe homes for 2006.

Data of another real estate agency shows that the return yielded by residential properties in Bulgaria has fallen by 3% in year to around 8.5%.

The agency noted the increasing popularity of gated residential communities with at least 30 such developments currently under construction in the Sofia area. Upon completion, they are expected to place on the market some 5,000 apartments.