Property market booms across ex-communist EU

Average prices in the Polish capital Warsaw rose by more than 50 percent last year to reach 1,935 euros (2,620 dollars) per square metre, according to the RedNet property agency.

A square metre in a top-of-the-range building in the city currently fetches 5,000 euros.

Luxury buyers in other countries which joined the EU in 2004 can get a better deal -- in Budapest, Hungary, the price is around 4,000 euros, while in the Slovak capital Bratislava they can expect to pay 3,500 euros.

In the Czech Republic, meanwhile, a square metre of luxury property in Prague goes for some 4,500 euros.

In a sign of the times, even the "panelaks" -- Prague's faceless communist-era six-storey blocks -- are now in demand.

Over the past five years, the price of a 60-square-metre apartment in Jizni Mesto, an estate in the city's south, has almost doubled to 80,000 euros.

"Demand has increased a lot because they are still affordable for people without high wages," said Robert Persein, an estate agent at the Cesko-Moravska company.

Pavel Kuhn, of the Ceska Sporitelna bank, noted that Czechs are now taking out 30-40 year mortgages.

In Lithuania, prices soared from 500 to 1,700 euros per square metre between 1998-2006. In contrast, average monthly salaries over the same period rose from 300 euros to around 460 euros.

Across the Baltic states, real estate prices grew in 2005 by 55 percent in Latvia, 40 percent in Lithuania and 28 percent in Estonia, according to the bank DnB Nord.

In Romania, which joined the EU in January, house prices in Bucharest have tripled over the past five years and the boom is encouraging people to set up shop as property dealers, according to Felicia Nitu of the trading company Real Estate Exchange.

Prices in neighbouring newcomer Bulgaria began rising fast in 2006, just ahead of EU membership.

"Demand remains strong, and since the beginning of 2007 prices rose by 15-20 percent on average," said Teodora Dimova of the ERA Bulgaria real estate agency.

With prices also climbing across the region for offices and holiday homes, there are growing warnings of a real estate bubble, particularly in Prague and in the Latvian capital Riga.

"The crediting and real estate madness that started a couple of years ago, what I would call this feast in times of plague, cannot last forever," warned Edgars Sins, the head of the Latvian Real Estate Association and boss of leading real estate company, Latio.

A recent study by the Czech Real Estate Market group noted that the country's property boom recalls others in previous EU newcomers.

"What is now occurring in the Czech Republic is similar to the rise of real estate in Italy, Spain, Ireland and Portugal when they joined the EU and property values rose in some cases by 500 percent in a time-span of eight years," it said.

Although getting a foot on the property ladder was a dream for millions in the region after the fall of communism, spiralling prices are forcing many to put their hopes on hold.

In Bratislava, the average cost of a square metre is now 1,500 euros -- three times the average monthly wage.

"I can't manage to buy anything. It's all so expensive," said Samuel Kubani, a 30-year-old bachelor who is looking for a studio in the centre of Bratislava.

The situation for Kubani and other would-be buyers is unlikely to get easier in the near future, because Slovakia is being tipped as one of the next property investment hotspots.

According to the Global Property Guide, prices there are inexpensive -- for wealthier foreign investors -- while economic growth is "strongly positive," rental income tax is low, and there are no capital gains tax on long term property holdings.

With EU membership seen as a stamp of stability, the region has since 2004 become a fixture in real estate investment portfolios.

Slovakia's ski resorts are now sparking interest among people from Britain and Ireland looking for a holiday home or simply hunting f