Investing In Property In Estonia
by Tem Pearson on 2007-09-22
As Estonia hits the headlines for topping the Knight Frank’s Global House Price Index charts for yet another year with an annualised growth last year of 50 percent, the scope for property investment in Estonia looks promising.
Tallinn, the capital of Estonia, is growing at a particularly rapid rate and this is fuelled by the speed in which property can be exchanged and completed (typically within a matter of two weeks). The speed of transactions, in Estonia, is mainly down to the fact that most purchasers do not have another property to sell and are, therefore, not subject to long chains like other more developed European countries.
In an attempt to encourage more people to buy in Estonia, there has been a drive by the financial institutions to provide low cost mortgages. Low interest rates and less stringent rules mean that many younger generation Estonians are now jumping onto the property ladder, which is driving property prices up in many pars of Estonia.
The current main hotspot in Estonia is Tallinn. This is one of the world’s leading areas for builders, second only to Dubai, over the last few years. It has been a real race for the construction industry to keep up with local and investor demand and supply is still below demand in most parts of Tallinn. Another key reason that Tallinn has seen such growth recently is that the residents are keen to shake off the old Soviet influences and live in a new build luxury apartment.
Bearing this in mind, it is worth considering that the flurry of interest in new build apartments has left the renovation market sorely behind in the popularity stakes. Renovated property is not as popular as new build, in Estonia, and non-renovated property is less popular again, meaning that some serious bargains are there for the taking. In time, the new build market will simply become saturated and locals will turn their attention to the renovated property available.
Prices across Estonia are very favourable in comparison to more developed countries, with country properties in need of renovation costing as little as £7,000/US$14,000 and a new build luxury apartment in Tallinn costing around £50,000/US$100,000.
One great way of seeing the potential of Tallinn is to look at the Finnish capital, Helsinki. Helsinki is only 55 miles away from Tallinn and the journey can take as little as 1 hour and 25 minutes by hydrofoil. Prices in Helsinki are, on average, 300 percent higher and it is likely that Tallinn and Helsinki prices are going to converge.
More and more people are now buying property in Tallinn and commuting. This is going to ensure that, over time, the Tallinn market grows to meet the prices of the Helsinki market.
Tourists are also discovering the region, with more than 3.3 million visitors heading to Tallinn, last year. EasyJet has also added Tallinn to its route list which has encouraged visitors in their droves to the area. Tallinn is becoming an increasingly popular city break destination and the demand for suitable rental accommodation is also booming.
Estonia is growing in every possible way. The local market is at an all-time high and tourists are really starting to discover this beautiful country. For long-term investments, consider the more rural property in need of renovation. For immediate appeal, look no further than new build apartments in Tallinn, but be prepared for a bureaucratic fight with the locals!
Tallinn, the capital of Estonia, is growing at a particularly rapid rate and this is fuelled by the speed in which property can be exchanged and completed (typically within a matter of two weeks). The speed of transactions, in Estonia, is mainly down to the fact that most purchasers do not have another property to sell and are, therefore, not subject to long chains like other more developed European countries.
In an attempt to encourage more people to buy in Estonia, there has been a drive by the financial institutions to provide low cost mortgages. Low interest rates and less stringent rules mean that many younger generation Estonians are now jumping onto the property ladder, which is driving property prices up in many pars of Estonia.
The current main hotspot in Estonia is Tallinn. This is one of the world’s leading areas for builders, second only to Dubai, over the last few years. It has been a real race for the construction industry to keep up with local and investor demand and supply is still below demand in most parts of Tallinn. Another key reason that Tallinn has seen such growth recently is that the residents are keen to shake off the old Soviet influences and live in a new build luxury apartment.
Bearing this in mind, it is worth considering that the flurry of interest in new build apartments has left the renovation market sorely behind in the popularity stakes. Renovated property is not as popular as new build, in Estonia, and non-renovated property is less popular again, meaning that some serious bargains are there for the taking. In time, the new build market will simply become saturated and locals will turn their attention to the renovated property available.
Prices across Estonia are very favourable in comparison to more developed countries, with country properties in need of renovation costing as little as £7,000/US$14,000 and a new build luxury apartment in Tallinn costing around £50,000/US$100,000.
One great way of seeing the potential of Tallinn is to look at the Finnish capital, Helsinki. Helsinki is only 55 miles away from Tallinn and the journey can take as little as 1 hour and 25 minutes by hydrofoil. Prices in Helsinki are, on average, 300 percent higher and it is likely that Tallinn and Helsinki prices are going to converge.
More and more people are now buying property in Tallinn and commuting. This is going to ensure that, over time, the Tallinn market grows to meet the prices of the Helsinki market.
Tourists are also discovering the region, with more than 3.3 million visitors heading to Tallinn, last year. EasyJet has also added Tallinn to its route list which has encouraged visitors in their droves to the area. Tallinn is becoming an increasingly popular city break destination and the demand for suitable rental accommodation is also booming.
Estonia is growing in every possible way. The local market is at an all-time high and tourists are really starting to discover this beautiful country. For long-term investments, consider the more rural property in need of renovation. For immediate appeal, look no further than new build apartments in Tallinn, but be prepared for a bureaucratic fight with the locals!
About The Author: Providing essential information on buying property abroad, Tem Pearson is dedicated to offering all the necessary information for people looking to buy property in different countries. Visit www.buying-property-abroad.info for all the best info.