Propertastic! Downgrades Property in Baltics
Stratford-upon-Avon, United Kingdom, July 20, 2007 --(PR.com)-- Propertastic! (www.propertastic.com), a new website which claims to be the leading independent source of information for buyers of property in Central & Eastern Europe plus the developing Mediterranean area, today announced that it is downgrading its rating of property in the three Baltic States (Estonia, Latvia and Lithuania) from ‘hold’ to ‘sell’ in light of gloomy analysis of the country’s economic prospects plus recent developments on the local property markets.
The three ‘Baltic Tigers’ have seen Europe’s largest gains in house prices over the past few years. Latvia was the #1 territory for 2006, with prices increasing by an average of 61.2%. Estonia was the champion for 2005 and again saw impressive rises of 24.5% in 2006. Lithuania was never far behind its two neighbours with a rise of 21.7% in 2006 and Knight Frank forecasting that it would see the fastest growing territory in Europe for 2007 with a predicted growth of 20%.
However, with property prices in the country’s capital cities now at a level equal to or higher than more established Scandinavian capitals such as Helsinki, Stockholm and Copenhagen and rental yields among the lowest in Europe, many observers have been claiming that prices are now over-inflated and that, sooner or later, the ‘property bubble’ would soon be ready to burst.
On a wider level, economic analysts have been getting increasingly nervous about the precarious nature of the countries’ economies due to a combination of factors including high inflation rates, excessive consumer spending plus high levels of emigration, a situation which led ratings agency, Standard & Poor to downgrade the ratings for all three territories. Some analysts are predicting an ‘economic meltdown’ in the same style as the South-East Asian Crisis in the late Nineties, or 2003’s run on the peso in Argentina.
Propertastic! Chief, Nick Pendrell, comments, “in the past weeks we have been receiving reports from all three markets that property prices have already peaked and are now starting to decline.”
“In Estonia, many speculators who bought off-plan properties hoping to flip them for a profit on the secondary market now have to sell them below cost in order to move them. Some buyers are even prepared to lose their deposits in order to break their contracts.”
“In Latvia, which is the country worrying analysts the most, real estate transactions are down over 15% in June and prices have fallen 3-5% over the past few weeks.”
“The real estate market in Lithuania is currently relatively stable but, so closely are the three Baltic States linked economically, that we believe that prices will start falling over the coming months.”
“In summary, we are advising that now is not the time to buy property in the Baltic States. We believe that there are significantly better returns to be made from property elsewhere in Eastern Europe and the developing Mediterranean currently – we’re particularly bullish about Egyptian resorts, Montenegro, Bratislava and Sofia at this moment.”
About Propertastic! (www.propertastic.com)
Propertastic! is a new online resource that was established as a ‘one-stop resource’ for anyone considering purchasing residential property in Central & Eastern Europe and the developing Mediterranean region. Presented in a lively and easy-to-read style, the website offers totally unbiased and independent research on the real estate markets in Bulgaria, Croatia, Czech Republic, Egypt, Estonia, Hungary, Latvia, Lithuania, Montenegro, Morocco, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey.
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The three ‘Baltic Tigers’ have seen Europe’s largest gains in house prices over the past few years. Latvia was the #1 territory for 2006, with prices increasing by an average of 61.2%. Estonia was the champion for 2005 and again saw impressive rises of 24.5% in 2006. Lithuania was never far behind its two neighbours with a rise of 21.7% in 2006 and Knight Frank forecasting that it would see the fastest growing territory in Europe for 2007 with a predicted growth of 20%.
However, with property prices in the country’s capital cities now at a level equal to or higher than more established Scandinavian capitals such as Helsinki, Stockholm and Copenhagen and rental yields among the lowest in Europe, many observers have been claiming that prices are now over-inflated and that, sooner or later, the ‘property bubble’ would soon be ready to burst.
On a wider level, economic analysts have been getting increasingly nervous about the precarious nature of the countries’ economies due to a combination of factors including high inflation rates, excessive consumer spending plus high levels of emigration, a situation which led ratings agency, Standard & Poor to downgrade the ratings for all three territories. Some analysts are predicting an ‘economic meltdown’ in the same style as the South-East Asian Crisis in the late Nineties, or 2003’s run on the peso in Argentina.
Propertastic! Chief, Nick Pendrell, comments, “in the past weeks we have been receiving reports from all three markets that property prices have already peaked and are now starting to decline.”
“In Estonia, many speculators who bought off-plan properties hoping to flip them for a profit on the secondary market now have to sell them below cost in order to move them. Some buyers are even prepared to lose their deposits in order to break their contracts.”
“In Latvia, which is the country worrying analysts the most, real estate transactions are down over 15% in June and prices have fallen 3-5% over the past few weeks.”
“The real estate market in Lithuania is currently relatively stable but, so closely are the three Baltic States linked economically, that we believe that prices will start falling over the coming months.”
“In summary, we are advising that now is not the time to buy property in the Baltic States. We believe that there are significantly better returns to be made from property elsewhere in Eastern Europe and the developing Mediterranean currently – we’re particularly bullish about Egyptian resorts, Montenegro, Bratislava and Sofia at this moment.”
About Propertastic! (www.propertastic.com)
Propertastic! is a new online resource that was established as a ‘one-stop resource’ for anyone considering purchasing residential property in Central & Eastern Europe and the developing Mediterranean region. Presented in a lively and easy-to-read style, the website offers totally unbiased and independent research on the real estate markets in Bulgaria, Croatia, Czech Republic, Egypt, Estonia, Hungary, Latvia, Lithuania, Montenegro, Morocco, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey.
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Contact
Propertastic!
Nick Pendrell
+371-2881-8007
www.propertastic.com
Nick Pendrell
+371-2881-8007
www.propertastic.com
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