Estonia may have experienced unprecedented price inflation (over 556 per cent between 1997 and 2006) but the cost of purchasing there is beginning to outweigh the potential investment benefits.

The same, says the report, can be said for property prices in Latvia and Lithuania which, while enjoying capital appreciation, are unable to keep pace in terms of gross rental yields.

The Global Property Guide has therefore declared Slovakia as the best bet for investors looking to plough their cash into property overseas.

Why? One reason is the country’s strong GDP performance, a factor closely associated with long-term property price rises.

Unfortunately, there are no house price statistics for Slovakia, but the Global Property Guide reckons it’s pretty safe to presume that prices are low.

Furthermore, they estimate that gross rental yields in Bratislava, the capital city, are very high at 10.1 per cent, a sure indicator to investors to strike while the iron is hot.

With the added bonus of low rental income tax and no capital gains tax on long-term property holdings, the advantages and future economic growth make it one of Europe’s most tempting investment propositions.

Other Contenders

The Global Property Guide also backs four other European countries for their investment potential, with Turkey being the next in line.

While prices in Istanbulare not regarded as cheap, the GDP growth, healthy market and prospect of no capital gains tax boost its attractiveness.

Sofia in Bulgaria also boasts some highly impressive gross rental yields at 10.6 per cent, although house price inflation is beginning to ease and transaction costs remain high.

The 8.17 per cent gross rental yields offered in Bucharest, Romania, a newly opened and growing market, should also attract investors.

In addition, an economy that’s on the rise, combined with low rental income tax, no capital gains tax and good GDP growth make it an attractive proposition.

The Global Property Guide tip Hungary as something of an outside bet, given its weak economic growth.

Nevertheless, with gross rental yields around 6.6 per cent to 8.3 per cent in the Capital centre and house prices that are still relatively low, the state of the market may depend on how committed the government remains to strengthening the economy.

The global index, compiled by the realtor, shows global property price inflation running at 8.5% in the year to June, below the 12.3% in the year to June 2005 but sharper than the 6.1 per cent inflation rate recorded in March.

In Bulgaria growth was buoyant with speculation and interest from foreign second-home buyers helping maintain house price inflation at 20.5%, the agency said.

Knight Frank predicts that Slovenia and Slovakia will be the eastern European hot spots in the year ahead, while Moscow will rival London as the world’s most expensive city within the next five years. Property prices in Germany, where inflation is 0.5%, are also expected to see sustained growth as the economy continues to recover.

Property prices in Riga, the Latvian capital, surged by 45.3% in the year to June, after a gain of 73.5% the preceding year.

The overall picture from the survey is one of moderated growth, with house price inflation in the US falling from 14.1% a year earlier to 9.4%, that of France slipping from 15.3 to 9.4%, China from 8 to 5.8%, Italy from 11.2 to 5.2% and the UK from 6.1 to 4.8%.

The Knight Frank index, which covers 30 countries or capital cities, is based on official statistics or local survey data.

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EastEuro Link is proud to invite you to its forthcoming international forum on real estate and construction for the region of Central and Southeast Europe. Following the successful concept of bringing together regional government representatives and key industry figures, this event is tailored to provide knowledge and tools.

the Second Annual Real Estate and Construction Conference for Central and Southeast Europe

REGION UNDER CONSTRUCTION

Hilton Hotel, Sofia, Bulgaria
31. March 2006.

www.realestate.easteurolink.co.uk

Hear the very latest about the real estate and construction industry development in Central and South Eastern Europe. Don’t miss the opportunity to meet CSEE key stakeholders and discover the long-term vision for this rapidly transforming region. The conference will provide a superb opportunity to gather information and build new business relationships with the key players in the CSEE market.

Who will come?

· High Government Officials

· International Real Estate and Construction Organizations

· Property Developers

· Project Managers

· Financiers & Lenders

· Portfolio and Fund Managers

· Lawyers in the practice of real estate and property development

· Investment Advisors and Consultants

· Hedge Funds

· Insurance Companies

· Investment Executives

· Regulators

· Prime Brokers

Key topics to be discussed:

· The Role of governments in real estate and construction development

· Market regulations and legislative development in CSEE

· Comparison of investing in commercial, residential, industrial and infrastructure sectors

· Comparison of investment opportunities in different CSEE countries

· Overviews of real estate and construction markets in the region

· Financing issues for investing in CSEE property markets

· PPP environment in CSEE

· Future trends in property development and investment in CSEE

Network with your peers, competitors and future partners at the leading event for those interested in meeting the key players in the local market.

For the latest information regarding list of speakers and agenda visit
www.realestate.easteurolink.co.uk

Exceptional promotional opportunities available now!

TO BOOK YOUR PLACE, please contact Ms Alexandra Z. at:

Tel:+381 11 328 6 515

Fax: +381 11 20 26 115

e-mail: alexandra.zivkovic@easteurolink.co.uk

All attendees at the conference will receive a FREE CD ROM of conference material containing ministerial presentations and other conference material.

www.PropertyandInvesting.com

House prices in the country are expected to go up four-fold in the next 10 years as Romania enters the EU in 2007 and its economy gains strength, the programme, A Place In The Sun, said, based on research work. The show ranked the country as No 1 in Europe in terms of property investment returns.

A house in Romania costs on an average 17,000 pounds. The show said 100,000 pounds invested now will be worth 514,000 pounds in 10 years. Investors should do well to buy property before the country’s entry into the EU.

Poland comes at No 2 as its economy is expected to benefit from the increased investments made by foreign firms. A 100,000-pound investment will give back 493,000 pounds in 10 years.

At the third place is Portugal, which can return 460,000 pounds in 2016 on an investment of 100,000 pounds now.

The Baltic states of Latvia, Lithuania and Estonia are at the fourth place, followed by Sweden and Belgium.

The other countries on the top of the list are Slovakia, Slovenia, Finland and Hungary.

The list was compiled on economic data from PricewaterhouseCoopers looking at how quickly the economy in each country is expected to grow and how much will be the rental returns.

Eythor Edvardsson, a native of Iceland is the new regional director for the three Baltic countries which formerly were part of the Soviet Union. Edvardsson finished Commercial School in Iceland and has worked in real estate for a number of years and has been part owner of an independent Lithuanian real estate investment company.

“Through the years, my holiday travels to USA more often ended up in my exploring the real estate market. There I first came in contact with RE/MAX,” commented Edvardsson. “I learned about the atmosphere of this organization and it suited my personality well. I really love the active character throughout this international network. Estonia, Latvia and Lithuania are very active and attractive markets that are growing fast with the help of foreign investments. Knowing how creative, independent, educated and hard working Baltic people are, I am sure we can build a remarkable RE/MAX team.”

Edvardsson is also an accomplished singer, author and music events organizer and has served as chairman of the Fostbraedur choir since 1994. He was instrumental in organizing events and festivals in Denmark, Finland and Russia including a seasonal concert in Philharmonic Hall of St. Petersburg.

“We are pleased to welcome Eythor Edvardsson to the RE/MAX family,” said Peter Gilmour, RE/MAX senior vice president, international franchise sales and brokerage. “His background in real estate and knowledge of his region will certainly mean operations will be off and running quickly. His energy and experience will be most valuable to building a quality organization in these three countries.”

Estonia has a population of 1.3 million. It borders the Baltic Sea and Gulf of Finland, between Latvia and Russia. After centuries of Danish, Swedish, German, and Russian rule it attained independence in 1918. Forcibly incorporated into the USSR in 1940, it regained its freedom in 1991, with the collapse of the Soviet Union. Since the last Russian troops left in 1994, Estonia has been free to promote economic and political ties with Western Europe. It joined both NATO and the EU in the spring of 2004.

Latvia, which borders the Baltic Sea between Estonia and Lithuania, was annexed by the USSR in 1940 after a brief period of independence between the two World Wars. With a population of 2.3 million Latvia’s independence was reestablished in 1991 following the breakup of the Soviet Union. Latvia joined both NATO and the EU in the spring of 2004.

Independent between the two World Wars, Lithuania borders the Baltic Sea between Latvia and Russia and was annexed by the USSR in 1940. On March 11, 1990, Lithuania became the first of the Soviet republics to declare its independence, but Moscow did not recognize this proclamation until September of 1991. Lithuania subsequently restructured its economy for integration into Western European institutions and joined both NATO and the EU in the spring of 2004. It has a population of 3.6 million.

The EU will support educational and media campaigns in those countries to help people understand the changes that stem from switching their national currencies to the euro.

Slovenia, Estonia and Lithuania linked their currencies to the euro through the European Exchange Rate Mechanism in June 2004. Nations must be in the system for at least two years before they can join the euro zone.

The three countries, who joined the EU last year, hope to make the switch to the euro on Jan. 1, 2007, putting them first in line among the 10 newcomers for adopting the continent’s single currency.

An EU opinion poll shows that few people in the new member states feel as though they understand the euro and many fear they will have trouble converting prices or will face inflation after the changeover.