DUBROVNIK, Croatia (Reuters) -- With European Union membership looming, Croatia's real estate market is booming as Europeans seek an affordable place in the sun and locals seek a fast profit.

But with property prices touching 10,000 euros ($12,700) per square meter in parts of Dubrovnik, the Adriatic city that is top destination for property-buying foreigners, the country's authorities are facing calls to curb the invasion and ensure locals are not priced out of the market.

"If you want to buy any property in the Dubrovnik city area, be prepared to pay at least 300,000 euros," is one of the first things Slavica Gavranic tells her clients.

That will fetch you an average-sized flat, possibly inside Dubrovnik's medieval walls, where the price of a square metre ranges from 4,000 to 10,000 euros. Outside the old walls, it varies from 2,500 to 5,000 euros.

Gavranic runs Dubrovnik Sun, one of several booming estate agencies. "Our clients are mostly English, Irish and Dutch," she said.

"We have a lot of foreigners who are making inquiries about what they can buy, saying they can spend up to 200,000 euros. Our answer is simple -- there's virtually nothing you can buy for that money in the wider Dubrovnik area."

The potentially lucrative market has prompted a number of foreign-owned agents to open up businesses.

"Foreigners have smoother access to the markets where clients are mostly coming from, so they can more easily advertise themselves there. But Croats have a slight advantage as they know the market and local laws better," she said.

As prices skyrocket, and even neglected old stone houses sell for a small fortune, property owners have the chance to become wealthy. But the boom has raised fears that many Croats will be priced out of the market.

As part of its move towards European Union membership, Croatia must open up fully its real estate market in 2009. EU citizens have the right to live and work in other member states.

Several conservative parties are urging the government to ask Brussels to delay full market liberalization and also find ways of protecting Croatia's unspoilt landscape.

At present, citizens from most EU states can freely buy property in Croatia but face a complex bureaucratic procedure which can take two years or more. Croatia has also only recently started to tackle its muddled property rights, the legacy of 50 years of communist rule.

In the past decade fewer than 4,000 foreigners have legally bought a house in Croatia, but many have found ways around the law, often by registering token firms in Croatia. Some observers estimate their numbers are actually 10 times higher.

Zagreb moved to simplify property-buying procedures last month by putting the Justice Ministry in charge of issuing permits.

In spite of the public and media outcry, Gavranic says locals are often keen to sell their property. "Some want to renovate their homes, some need money for their children to get a better education, some sell what their families have owned for decades for existential reasons," she said.