Bulgaria's Black Sea port city of Varna was home to the most expensive real estate in 2009, data from the National Statistics Institute (NSI) revealed on January 25 2010.

While real estate prices decreased on all fronts across Bulgaria during the year, as a direct impact of the global economic downturn, properties in Varna were offered for as much as 1686 leva for a sq m, Dnevnik reported.

Sofia came in second with 1585 leva for a sq m, followed by Bourgas with 1360 leva for a sq m.

Overall, real estate in Bulgaria lost around 20 per cent of its value in 2009, according to the NSI research. In the fourth quarter of 2009 alone, levels dropped in 16 municipalities across the country, the steepest of which, 6.4 per cent, was in the northern city of Pleven.

However, the real worth of property in Bulgaria is somewhat difficult to calculate. While the economic crisis has undoubtedly taken its toll on the industry, the widespread practice of declaring a figure different from the actual appraised value during a transaction means that real estate pricing is hard to regulate.

In January 20 2010, Tatyana Emilova from real estate consultancy firm Colliers said that value of real estate was expected to decline by another 10 per cent on average by July 2010.

The ongoing drop in value in the first half of the year was expected to be succeeded by "stabilisation in the market" in the second half, she said.

For 2010, however, experts believed that there would be an increase of demand in the market as well as greater flexibility given the lower prices, and investors were said to be "willing to negotiate," Dnevnik reported.

Newly incorporated legislative amendments to real estate transactions that would outlaw cash payments would have little or no effect on current market conditions, according to Atanas Garov, CEO of Colliers in Bulgaria.

Garov reckoned that real estate would continue to be sold at prices different from official appraised values and that cash payments would continue.

"If the Government wants real transparency in the industry, it must implement measures whereby the cash flow would be constantly monitored and evaluated," Garov was quoted by Dnevnik.