PART II: INVESTMENT POTENTIAL OF INDIVIDUAL COUNTRIES

CHAPTER SIX: PROPERTY INVESTING IN THE BALTICS

The Baltic states (Latvia, Lithuania and Estonia) are one of the most popular investment markets of the moment.

The capital cities of Riga, Vilnius and Tallinn are particularly popular with buyers looking for something which combines capital appreciation with regular rental income over the medium to long term. In the 2006 Place in the Sun study of potential returns over the next ten years the Baltics were placed fourth with potential return assessed at 356%, possibly an overoptimistic assessment.

Part of the appeal of the Baltics is the way that they combine all of the preconditions for a strong property market. The Baltics compete with Slovakia to be crowned as the greatest economic success of the 2004 accession states; the population is getting richer; mortgages are available on attractive terms and fees and taxes are low. The quality of build is also extremely high.

As well as long term lets to locals, the three capitals also have a strong short let market. The historic centres of all three Baltic capitals are listed as Unesco world heritage sites and are on the short-breaks circuit.

Vilnius has Gothic, Renaissance and Baroque buildings whilst Riga stands out for Art Nouveau architecture. Tallinn has an astonishingly attractive medieval Old Town. Ryanair and easyJet both fly to the Baltics from the UK and visitor numbers are rising steadily. In 2005 visitors to Vilnius and Tallinn rose by more than 30% – placing the cities among the fastest growing tourism markets in Europe. Visitor numbers at Tallinn…