Baltic states best overseas investment say experts

18 Sep 2006 12:15

Emerging property markets in the Baltic states of Estonia, Latvia and Lithuania have are some of the best places to invest in property overseas, according to experts at the Property Investor Show.

The highest economic growth rates in Europe between 2000 and 2004 and recent economic reforms have made the Baltic countries attractive to foreign investors.

Prospects for strong capital growth are good as prices are currently rising fast in Estonia, Latvia and Lithuania, thanks to residents looking for better properties as they become more prosperous.

Tourism is also a factor in property price growth, with increasing numbers of holidaymakers visiting the countries.

Toby Stone, of investment advisors for Baltic real estate Bristol and Stone, says: “Conditions for property investment in Estonia, Latvia and Lithuania are strong and good returns can be obtained if you know which are the best areas.

“However, over the past few years the markets have become increasingly sophisticated and investors would be best advised to buy through a company that has presence in the country and fully understands the fast-moving market.”

Nick Clark, of The Property Investor Show, comments: “Investors face a huge choice when deciding which markets to invest in.

“The Baltic states have a lot to offer at the moment but a lot of research into the market conditions is needed before going ahead, to ensure that the investment is a success.”

Investors’ have been able to access Estonian, Latvian and Lithuanian property markets more easily since the countries joined the European Union in 2004.

Experts see Estonia in particular as an excellent prospect for property investment as the economy grew 9.1 per cent in 2005 with an influx of foreign investment. Levels of unemployment have also been falling, and inflation rates remain low.

New build apartments in central Tallinn, Estonia’s capital, rose almost 50 per cent in 2005, and national wage growth of eight per cent from 2001 to 2005 is set to continue, fuelling the increase in demand for property.

Similarly, Latvia’s capital city, Riga, saw price increases of between 70 per cent and 90 per cent in 2005, with new builds in the region up by 30 per cent.

With mortgage loan rates of 1.8 per cent and increasing demand for new apartments due to housing deteriorating, experts also see the country as a great place to invest in property.

Lithuania’s fast growing economy – annual growth of has been 7.5 per cent since 2001 – and price increases of 40 per cent and 65 per cent in 2005 also make it a top place to invest.

Experts have also flagged that the city of Vilinus status as European Capital of Culture for 2009 will result in an increase in tourism to the country.

The Property Investor Show takes place in London from September 22nd to 24th 2006.