China has recently announced a huge investment into the Port of Tallinn which will enhance Estonia’s position as the main transit port for the Baltic area. China’s Ningbo Port has agreed to help build an approximately 150 million euro container terminal and goods warehouse together at Muuga on the eastern side of Tallinn. Port of Tallinn Chairman, Ain Kaljurand was quoted as saying that the terminal should be completed by the beginning of 2011 and that total investments would amount to $220 million.

The new port will will become the largest concentration and distribution center for Chinese products around the Baltic Sea area. The products can be also transferred to surrounding areas like Northern Europe, Western Europe and the northwest of Russia.

A new Knight Frank survey has identified Tallinn as the 3rd best city in Europe for property investment. The survey found that Tallinn offers excellent potential returns due to the strong Estonian economy and shortage of quality, new build property in the city.

Tallinn came third to Bucharest and Riga. However, compared to the Romanian and Latvian capitals, Estonia offers a fully computerised land registry, strong business culture, low levels of corruption and taxation and an increasingly affluent middle class providing demand for re-sale apartments.

For more information: http://www.telegraph.co.uk/property/main.jhtml?xml=/property/2007/10/27/pneweurope127.xml - Daily Telegraph, 20 Best Cities in Europe

Estonia’s embracing of new technology continues a-pace – online tax returns were implemented several years ago and 86% of taxpayers file their returns online, parents can already check children’s grades online and many citizens voted online in the recent national elections. More recently, the Estonian health service started the development of a new national E-Health system which will see the digitalisation of the medical records of every person in the country including integration across all hospitals and GPs by 2009.

Being developed by Hewlett Packard, the system will cost 2.2 million euros largely funded by the EU Structural Fund – a small sum in comparison to the estimated £12.4 billion (€18.4 billion) to implement a similar digital patient record system in the UK.

The latest statistics released by the Estonian Statistical Office (www.stat.ee) show a continued growth in both property prices and rents in Tallinn throughout 2006.

In the 4th quarter of 2006, property prices for 2-room apartments in central Tallinn showed a 9.8% increase (from 34,600 EEK per m2 to 38,000 EEK per m2) whilst prices across Tallinn as a whole showed a more modest 6.9% over the same 3 month period.

These increases in property prices have begun to price some domestic buyers out of the property market and, as a result, the demand for properties to rent has increased. This, in turn, has led to a rise in rental prices which increased by 15.9% in Tallinn city centre in 2006 compared to 2005 (to 131 EEK per m2 from 113 EEK per m2). This rise in rents accelerated in the 4th quarter of 2006 and average m2 rents in central Tallinn now stand at 150 EEK per m2 according to the Estonian Statistical Office. It is expected that rents will rise further during 2007 as the trend towards renting property continues.

For more information: www.stat.ee

Following the General Election on 4th March 2007, Estonia’s parliament, the Riigikogu, recently approved a new centre-right coalition government, led by Prime Minister Andrus Ansip and the new government was sworn in on 5 April. President Toomas Hendrik Ilves asked Andrus Ansip, leader of the Reform Party that won most of the votes, to be the next prime minister.

The new three-party government formed includes Ansip's Reform Party (R), the right-wing nationalist Pro Patria and Res Publica Union (PPRP) and the Social Democratic Party (SD), which together make up 62 of 101 seats in the Estonian assembly.

The new government is expected to continue the pro-European and business-friendly policies conducted by the outgoing government. The new coalition promised to give a boost to the country's birth rate granting financial incentives for parents.

The coalition also announced that it would reduce the flat tax rate from its current 22% to 18% by 2011 in order to boost foreign investment and economic growth.

In its recent Economic Forecast for Economic Growth 2006-2008, Estonia’s central bank, the Bank of Estonia predicts Estonia's economic growth to increase by 11.8% in 2006 and by 8.3% and 7.6% in the next two years, respectively.

In assessing the performance of the economy, the Bank comments that the strong growth of the economy is ‘mainly supported by a prompt income growth and substantial foreign capital inflow’ – mainly inward investment from Sweden and Finland as well as funding from the EU Social Fund.

The Bank expects growth to continue to be strong throughout the rest of this decade: ‘The productivity growth of enterprises together with wages depending thereon, prudent monetary and fiscal policies, and the strong financial sector will help alleviate possible economic setbacks at the end of this decade’.

Property in Estonia’s Managing Director, David Laity recently appeared in a 30 min programme about buying property in Estonia as part of the ‘Property Kings’ TV series. This programme was shown on Sat 27th Jan 2007 on Overseas Property TV Channel (Satellite/Sky Channel 287).

David commented that this programme should help to encourage more people to consider investing in property in this still reasonably unknown, property destination. If you missed the programme, please keep an eye on this new TV channel as it is likely to be repeated over the next 6 months.

For more information: http://www.overseaspropertytv.com

Estonia has recently been featured in a number of UK national newspaper articles underlining the country’s growing reputation as a stable property investment destination.

On the 10th June, The Daily Telegraph property supplement featured a 2-page article on the Estonian property market entitled ‘Value and Beauty in Fly-To-Let Land’. This article identified Estonia’s growing IT industry as one of major drivers behind the country’s economic growth. Estonia is the home of Skype and was recently dubbed the Silicon Valley of the Baltics by The New York Times.

On 5th July, The Independent again highlighted Tallinn as the centre of investment in the booming Estonian economy which grew by 9.8% in 2005. According to the Knight Frank global house-price index, Estonia experienced the fastest world-wide property price growth (17%) in 2005. The article also described how many investors are now beginning to buy land in the Estonian countryside as a good long term investment.

On 7th August, The Daily Mail highlighted Tallinn as one of the best places to invest in property in Eastern Europe citing its proximity to Finland, where prices are much higher, and strong economic fundamentals as the key reasons to consider buying in Tallinn.

All 3 articles highlighted Property in Estonia as the leading UK-based property agency helping investors buy in this growing market.

For more information: www.thisismoney.co.uk (Daily Mail)

On 28th of March 2006, the Ministry of Culture decided to name Tallinn as the European Capital of Culture 2011. The "European Capital of Culture" event gives European cities the opportunity to present a cultural programme lasting around a year, highlighting the richness, diversity and shared characteristics of Europe's cultures.

Over the past twenty years, the event has been very successful in terms of the cultural and socioeconomic development of the cities concerned. It is predicted that the event will significantly raise the tourist profile of Tallinn and boost economic growth in the area further.

For more information: www.tallinn2011.ee/

Property in Estonia recently assisted Freeform TV with the property research and filming of the popular ‘A Place in the Sun’ programme. The programme presented by Amanda Lamb featured a UK couple looking to buy an investment property for a budget of £80,000.

It was filmed between 3rd and 7th July 2006 during a very hot sunny spell and temperatures rose to 32C during filming which, given the demanding filming schedules, was not fully appreciated by the film crew! The programme will be shown on Channel 4 in a prime time slot later in 2006.

For more information: www.channel4.com/4homes/ontv/place_in_the_sun

According to official figures from the Bank of Estonia (Eesti Pank), the Estonian economy grew by an impressive 9.8% in 2005. In their latest quarterly bulletin (April 2006), the Bank now forecasts economic growth of 8.1% in 2006, 7.6% in 2007 and 6.9% in 2008.

This level of growth has been largely underpinned by an increase in the volume of exports and an accelerating growth in domestic demand. However, despite this economic growth, the inflation rate is predicted to decline to 3.6 per cent in 2006 and to 3 per cent in 2007 partly due to postponement of increases in alcohol and tobacco excise duties.

For more information: www.eestipank.info/frontpage/en/

The European Commission signed an agreement with Estonia, Slovenia and Lithuania on Tuesday 8th Nov to help prepare the three new EU members for the introduction of the euro currency. Estonia already meets most of the Maastricht criteria for entry and plans to introduce the new currency on 1st Jan 2007. The only remaining criterion to be met is that the joining country needs to be a member of the European Exchange Rate Mechanism for 2 years. Estonia joined the ERM in June 2004 and therefore could, in theory, be ready to join the euro in mid 2006.

Following the signing of the agreement, the EU will support educational and media campaigns in the 3 countries to help people understand the changes that stem from switching their national currencies to the euro. Estonia has already published a National Changeover Plan which describes in detail how the changeover to the euro will be introduced.

Based upon experience of other countries which adopted the euro in the past, it is widely expected that the introduction of the new currency will provide further stimulus to real estate prices in the short and medium term.

For more information on Estonian National Changeover Plan for the Euro, see http://www.bankofestonia.info

During July and August 2005, Property in Estonia acted as the main real estate agents assisting Reef TV and the BBC with the research and filming for a programme about buying property in Estonia. This programme, which will be shown as part of the popular ‘Uncharted Territory’ series, will be shown first on BBC2 on 1st Dec 2005 at 3:30pm with subsequent screenings on BBC1 and in the US scheduled for the New Year.

Property in Estonia was commended for its “patience, enthusiasm, professionalism, hard work and commitment which resulted in a really positive and entertaining programme”. It is expected that this programme will help to put Estonia firmly on the property investment map and therefore should provide further stimulus to property prices over the next 12 months.

For more information on the Estonia Uncharted Territory programme: www.unchartedterritory.co.uk

Property prices across the whole city of Tallinn have continued to increase steadily over the last 8 years by around 10-15% per annum, rising in total by 153% between 1998 and 2004 (from 4,625 EEK/m2 in 1998 to 11,725 EEK/m2 in 2004).

However, the latest figures from the Statistical Office of Estonia (www.stat.ee) show that in the city centre area (Kesklinn) of Tallinn, 2-room, m2 prices increased by 26% year-on-year in Q2 2005 from an average of 19,200 EEK/m2 to 24,200 EEK/m2.

This indicates an acceleration in the rate of growth of property prices and bodes well for buyers looking to invest in the Tallinn property market which still remains very competitively priced compared with other Baltic capitals and nearby Helsinki where prices are still over 200% higher.

For more information: www.stat.ee

The Estonian economy grew even faster than expected in 2004 posting an overall annual GDP growth figure of 6.2%. Growth was boosted by good Q4 figures which showed manufacturing activity growing by 12.5%, investments by 6% and domestic demand by 7.3%.

Continuing into 2005, industrial output grew by 10.2% yoy in February 2005 with significant increases in the production of machinery and telecommunications equipment contributing to the economy's strong growth in exports. The prospects for 2005 continue to look good.

For more information: https://unet.eyp.ee/cgi-bin/unet3.sh/un3.w?act=SENDFILE&fname=MF050331.pdf

Property in Estonia has negotiated an agreement with one of the largest Estonian banks, SEB Eesti Uhispank, to offer mortgages to non-Estonians at attractive rates of interest. These loans will typically be offered at 70% loan to value (LTV) with interest rates around 3.5% (the rate is decided on a case by case basis but is unlikely to be above 4.5%). Such rates compare favourably to current UK interest rates. Evidence (i.e. bank statements) showing regular income and regular outgoings (other mortgages etc) are required. The maximum loan amount is calculated based upon the affordability of the monthly re-payments compared to 50% of your net income.

By borrowing at such attractive rates of interest, property investors can more easily leverage the amount of capital that they intend to invest.

For more information, please email us.

A number of new flight routes to Tallinn have recently been announced and look likely to significantly boost tourist numbers from Western Europe during 2005. It is anticipated that such increased volumes of tourists will provide further stimulus to the demand for city centre apartments both to rent and buy:

• KLM commenced a new daily service from Amsterdam to Tallinn on 23/3/05
• City Airlines have commenced a new service from Birmingham (via Gothenburg) to Tallinn on 21/3/05
• Estonian Air have announced the commencement of a new service from Manchester to Tallinn starting on 10/05/05
• Estonian Air have announced the commencement of a new service from Milan to Tallinn starting on 30/03/05
• Estonian Air have increased the frequency of their services to/from Dublin (to 4 times a week in June)
• Estonian Air have also announced increased frequencies to/from Brussels (to 4 times a week) and to/from Oslo (to a daily service)

For more information: http://www.easyjet.co.uk/EN/news/20040830_01.html

For more information: http://www.arcovara.ee/?id=437