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
