Increased tourism and a sustained bout of lower prices in Eastern Europe have attracted some interest from investors, which is causing the property market in the area to move in unpredictable patterns. Compared to statistics in 2007, apartment prices in places like Vilnius and Riga have fallen dramatically; however, those prices started to rebound last year before falling again in July. Prospective buyers are counting on predictions that prices in Eastern Mediterranean countries like Albania, Latvia and Lithuania will further improve as more tourists take note of the area’s beauty, economy and growing stability. For more on this continue reading the following article from PropertyWire.
Parts of the Baltic are seeing mixed fortunes in their real estate markets with some countries and cities with property price increases and others where values are continue to fall.
Apartment prices in Vilnius have remained stable in July with the Ober-Haus Baltic Apartment Price Index showing an average price of €1,208 per square meter. It means that the annual growth of apartment prices has decreased to 2.8%.
In June, the annual growth of apartment prices in the city was 3.6%. From the peak of the market in December 2007, to July of this year, apartment prices in Vilnius have dropped by a total of 39.1%.
In July prices in Kaunas, the second largest city in Lithuania, increased by 0.4%. No price changes were recorded in Klaipeda, Šiauliai or Paneveys. The annual change in apartment prices in these cities is still negative, down 2.8% in Kaunas, down 2.9% in Klaipeda, down 4.4% in Šiauliai, and down 2.6% in Paneve?ys.
Apartment prices in Riga have also fallen, but by less, down by 0.2%. Local buyers are active and show interest in small, economical one three room apartments in suburbs or apartments in new projects located near the centre, according to Ober-Haus.
During the past 12 months the price of apartments has increased by 4.6%. From the peak of the market in May 2007 until July this year prices for apartments in Riga have decreased by 59.5%.
The average apartment price in Tallinn decreased 1.4% in July after increasing 0.9% in June, the index also shows.
Compared to a year earlier, the average apartment price has increased 15.8% to €1,016 per square meter. But the number of transactions has decreased in the first half of the year, down by 7.4% comparing with the same period in 2010.
From the peak of the market in April 2007, average apartment prices in Tallinn have dropped by 40.5%.
Tempting more foreign buyers could be the answer for property markets in this part of Europe. An increase in tourists is seen as being a helping hand to the market in other emerging real estate markets in Europe.
According to Albania’s deputy minister of tourism, Suzana Turku, Albania was visited by 1.2 million tourists between January and June of this year while revenue from tourism increased 8.5% in the first half of 2011 compared to the same period last year.
According to Ravin Maharajah, partner of Lalzit Bay Resort & Spa, a five star luxury residential development located on Albania’s Adriatic coastline comments, Albania will burst forth as a tourist destination in the next five years generating considerable revenue.
‘Albania has rebranded itself offering a low cost of living, rapidly developing infrastructure and striking physical beauty, all the ingredients needed for the perfect tourist destination,’ he said.
‘Interest from international second home buyers is steadily increasing as people realise the buying opportunity is now, not after the prices have gone up,’ he explained.
‘Lalzit Bay will become one of the most desirable resorts in the Eastern Mediterranean as well as an attractive and attainable lifestyle and investment choice for those wanting a superior second home in the sun or indeed a buy to let property abroad,’ he added.
This article was republished with permission from PropertyWire.