Baltic property markets rebound

Estonia, where the property market is booming (Photo: Vikkies)

Property investment in Estonia has already been enjoying a strong boom, with sales up 15.6 per cent year-on-year in the third quarter of 2013. Average sales prices also soared across the same period, according to Statistics Estonia.

In 2014, the outlook remains positive, with all three Baltic nations forecast for economic growth. Estonia's GDP is set to grow 2.4 per cent, according to the country's central bank, up from 1 per cent in 2013. Lithuania is expected to see 3.5 per cent GDP growth, according to the Bank of Lithuania, up from 2.8 per cent in 2013.

Meanwhile, Latvia's joining of the Eurozone is antipicated to boost the economy, with the International Monetary Fund forecasting its growth to be the biggest among Central and Eastern European countries this year. Lithuania's pending adoption of the Euro in 2015 is expected to fuel the Baltics' position further, reducing any level of currency risk for investors.

With property sales now back to pre-crisis levels, according to Newsec, sales are predicted to top records in 2014, with commercial and residential real estate both seeing rebounds in demand. Indeed, H&M and IKEA have both entered the region's commercial property markets, with turnovers of the top shopping centres growing 8 to 15 per cent per annum and occupancy rates now at 97 to 99 per cent.

"A new cycle in the property market has begun as professionals start investing," says Newsec's Ricardas Cepas in the group's 2014 report. “Demand is increasing for residential properties and office space. However 2014 is expected to be challenging for all, property developers, owners and potential investors, in order to take the best out of the situation and maintain the development pace. The mid-term outlook of the region will remain strong."

"The interest from WEstern European countries is continuously increasing," the report adds, "and several transactions with investors from core European countries are expected to go through in 2014."