Estonia 2013: the growth leader not only in the Baltic States, but also in Europe

In the past year, property prices in Estonia grew steadily. In the year between the third quarters of 2012 and 2013, housing in Estonia has risen in price by 8.4% immediately, losing only to Germany in the European Union (11.2%) reported by ee24.com.

Estonian baltic neighbors completed the Q3 of 2013 with a much more modest growth rates: in Latvia prices increased by 2%; in Lithuania details are still unknown, but most likely they will be comparable with the Latvian.

For clarity, you can refer to the price of apartments in the Baltic capitals. According to Ober-Haus Baltic Apartment Price Index, from November 2012 to November 2013, average prices for apartments in Tallinn increased by 13.8 %, to €1,307 per sq.m, in Riga and Vilnius - by 2.4% to €1,013 and €1,215 per sq.m, respectively. Now apartments in Tallinn are only by 23.4% lower than in the best pre-crisis times. Vilnius will remained 38.7% to reach the past heights, and an apartment in Riga is sold for as much as 56.4% less than in 2007.

Estonians themselves, of course, are not pleased to rise in price of real estate. They believe that housing prices are warmed by residents of Russia and Finland, where salaries are higher than in Estonia. Earlier this year, an average citizen of Tallinn could afford to buy more "meters" than the inhabitants of Riga and Vilnius. But for 2013, while the prices of apartments in Tallinn walked up, Rigans came to the first place in the ranking of housing affordability in the Baltic States.

Estonia also enjoys the greatest interest from foreigners. Summer 2013 research of Ernst&Young Baltic revealed that investments in Estonia increased by 19% compared with the last year, and in Latvia and Lithuania they have decreased by 7% and 50%.

Expert Opinions of ee24.com portal

Alis Moll, chief financial officer and board member of Pindi Realia Group:

"The apartment worth €100,000 in Estonia can generate income of about 5-6% per annum. Partly yield will help to save capital, and the subsequent sale a few years later, will get the owner more profits due to price increases, which is observed in the last years.

Primary property went up most of all in the last two years. This segment took about 5-6% of the total market — and is very liquid now, demanded by both Estonians and foreigners.

Guests from Russia mostly buy cheap accommodation in the north-eastern Estonia, where the main criteria is to obtain the multivisa. We are a northern country, and it is important to consider that the maintenance of very cheap properties would cost you €90-150 per month, and that you will be able to use it for a limited time. In addition, over the last year has increased the demand for scenic and secluded places, in particular, near the coast of the Baltic Sea.

Basically, the Russians are buying the Estonian housing as a place to stay for a family on the weekends, on vacations, or as the main housing. But there are other benefits: one of them is an investment, as prices in recent years began to grow, and properties can generate income."