Published on 18 September 2005 at 01:15 pm
Filed under: Europe:- Estonia Property Guides » Estonia a Guide for Property Investors
Completely free from the shackles of Communist domination since August 20th 1991 this tiny Eastern European country of Estonia is now home to a prospering economy, growing numbers of wealthy middle class citizens and a strong and solid returning real estate market which is beginning to attract increasing numbers of international property investors.
Property investors are particularly attracted to real estate in Tallinn which is the capital city of Estonia, by the stability of the Estonian economy and by the long term capital growth prospects the country offers property buyers.
Since joining the European Union back in 2004 Estonia’s economy has gone from strength to strength. Underpinning this economic improvement is Estonia’s smooth transition to working with a modern market economy, its close economic and trading ties with Germany, Sweden and Finland and its world class telecoms and electronics sectors.
Investment into Estonia has increased since 2004, the country’s currency is closely allied with the Euro, the country offers businesses significant taxation benefits for making an investment into the country and personal taxation is fixed at 24% - all these facts mean that unemployment is dropping, productivity and output are increasing and the people of Estonia are becoming far wealthier.
Property investors in Tallinn have enjoyed up to 30% increases in the underlying value of their inner city properties over the past few years and many now claim that these increases are unsustainable. Of course, as the demand surge has abated and property prices have reached a fair peak it is true to say that house and apartment prices will now rise only steadily in the region of 9 - 12% annually. However, these steady increases and the average 10% rental yield achievable from the domestic market are only one area of interest to an investor looking at Estonian real estate.
The country has far more to offer an overseas property investor...and this increased potential comes directly from the local market. Wages in Estonia are increasing at a rate of between 7 and 10% a year, taxation has been cut from a blanket rate of 26% to a rate of just 24%, inflation in Estonia remains very low and the mortgage market has massive room for growth with experts predicting a rise of around 400 million Euros over the next four to five years.
All this points to just one thing - more Estonians will be able to afford property. As a property investor in Estonia your future market is the local one and the local one’s purchasing power is increasing substantially annually. Those buying investment property in and around Tallinn in Estonia now will be able to watch their investment grow as the population’s wealth grows - they will then be able to sell on their investment real estate for substantial profit to an increasingly affluent population.
Estonia is an economically successful country and one which is slowly enabling its citizens to grow wealthier; over the short to medium term as the country stabilizes, the mortgage market develops and the number of middle class Estonians grows there are great opportunities for overseas property investors to purchase suitable real estate to sell on in the medium to longer term to the growing numbers of affluent local citizens able to secure and afford mortgages.
Europe:- Estonia Property Reports
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