Aug. 17 (Bloomberg) -- A villa overlooking the Black Sea? Or a flat in the Bulgarian capital, Sofia? If you happened to be vacationing in the area this year, you might have noticed just how temptingly cheap all those properties for sale are.

Now you can take a chance on the market without going to the trouble of dealing with real-estate agents and lawyers. Several recent initial public offerings in London have been designed to raise money for the booming property market of Bulgaria. Some other share sales were aimed at the Russian market.

The catch-up between property values in Western and Eastern Europe isn't finished yet. Even as house-price bubbles burst in Western Europe, emerging markets such as Bulgaria may be immune.

Rapidly modernizing economies, rising investment and asset prices, and booming tourism, will keep property values climbing for years. In the long term, Eastern Europe's real-estate boom may stall as population growth wanes. Still, that's a long way off.

There is certainly no shortage of vehicles to put your money into. In London, several new companies have come to the market in the past few months raising funds to invest in Bulgaria.

Black Sea Property Fund Ltd. staged an IPO on London's Alternative Investment Market in March, raising 50 million pounds ($90.6 million) to invest in luxury holiday apartments in Bulgaria. It joined Bulgarian Property Developments Plc, which has been acquiring land for development in the country, which listed on the same market two months earlier.

Orchid Developments Group Ltd., a hotel and property development company operating in Bulgaria, listed its shares in London last month. Meanwhile, the Lewis Charles Sofia Property Fund, specializing in developments in and around Sofia, also plans a London share sale. It aims to raise 50 million pounds.

`Not Many Avenues'

Russia has also been attracting interest from investors wanting to take a punt on Eastern European property.

This month, Raven Russia Ltd. raised 153 million pounds in an IPO in London to invest in the Russian property market. That followed the listing of Eastern Property Holdings Ltd. in Switzerland in 2003. That company's share sale produced 50 million Swiss francs ($39.9 million) to put into Russian real estate.

``There's been a lot of interest in this sector this year,'' said Terry Olin, a spokesman for Eastern Property Holdings, in a telephone interview. ``There are not many avenues for private investors to get into this market.''

If the Bulgarian and Russian vehicles work, don't be surprised to see more companies specializing in the rest of emerging Europe.

Each enterprise is tapping slightly different markets, yet all of them are trying to take advantage of the same combination of cheap prices and booming economies.

European Demand

Black Sea Property, for example, is serving the growing trend for Europeans to buy real estate in other countries. ``Last year, 146,000 British people bought properties outside the U.K.,'' said Roger Hornett, London-based manager of the fund's property holdings, in a telephone interview.

``You can buy a two-bedroom luxury flat by the sea in Bulgaria for 40,000 pounds, which is less than the average British house has gone up in value by during the past two years. So we think there is going to be big demand from foreigners for holiday properties in the country.''

Still, just because something is cheap doesn't make it a sure bet. The issue is whether the Russian and Eastern European property markets can keep expanding.

Reliable figures on trends in property prices are hard to compile, the U.K.'s Royal Institution of Chartered Surveyors said in its latest review of the market. There is little historical data and not enough information comparing properties over time.

Communist Buildings

Moreover, much of the housing built under Communist central planning was of such poor quality that it is practically worthless. Most of it will have to be rebuilt.

``Despite little change in rents, investor demand in emerging Europe is surging across the board,'' the institution said. ``The primary driver is expectations for convergence in incomes over the medium to longer term to Western European levels, which will facilitate growth in rents.''

What kind of returns you might expect will vary. Hornett says the Bulgarian market has risen about 40 percent in the past two years. He predicts gains of at least 10 percent annually for the next three years.

That may be too optimistic. Still, equity markets across Eastern Europe remain strong. The Bulgarian stock market, for example, is up 32 percent this year. Asset prices are rising fast, and property is unlikely to be left out.

Economic Expansion

Growth is strong as well. This year, the Bulgarian economy may expand 5 percent, according to a Bloomberg News survey of five economists in August. Inflation is subdued and the government aims to join the European Union by 2007 and to sign up for the euro by 2010. There is little to make investors feel nervous.

In parts of Western Europe and the U.K., property prices have surged because of historically low interest rates and rising incomes. It looks like a bubble has developed. In Eastern Europe, real-estate prices are being driven by rapid economic growth and the need to replace low-quality housing. As people get richer, they spend more money on living somewhere nicer. It may be decades before that process is complete.

The boom in companies investing in markets such as Bulgaria isn't just a passing fad. Money is there to be made over the next few years -- and buying shares in a listed company is a lot less work than buying a property yourself.