What is the annual return on investment in Eastern European real estate?
Eastern European countries are becoming an increasingly attractive place for Russian investors. This can easily be explained by their development and GDP growth. According to experts, in 2017 the countries of Eastern Europe showed higher productivity than their neighbors in the west. For example, if we take GDP growth results, Bulgaria, Slovakia and Romania will be at least twice as productive as their German and French counterparts.
The main advantages of Slovakia for investors are its high liquidity, low price per square meter, not very different mentality and a large number of ski resorts. On top of that, crime is not so much developed here, the market is stable and banks are reliable. The average profit of investors in the housing industry is about 5%, but renting out does not enjoy such popularity. Since Bratislava is not a popular city for tourists. If an investor is serious about investing in real estate in Slovakia, he should pay attention to the trading floors. This is the strongest area in the country today.
For a long time Romania has been a tidbit for Russian investors. The main reason is low interest rates with high economic growth and high wages. Unlike other European regions, Romania has rather low housing prices, and the average income per home is about 6%.
Annual return on investment: Bulgaria
Many Russians go on holiday to Bulgaria because of its mild climate, but few people know that this is not only a tourist country, but also an attractive real estate market. Thus, Bulgaria has the lowest property taxes in Europe, only 0.15% of the price. In addition, the cost of housing in this region of Eastern Europe is also lower than in its neighbors. It is thanks to the low tax rate that Russian investors are so eager to get into this market, but it is worth noting that the construction of new houses here is very rare and very slow. Another stable area of real estate in Bulgaria is office space. It should be noted that out of all the existing offices, only 9% are empty. Similarly, the retail and industrial real estate industry is very stable.
According to experts, such a favorable situation will continue to exist in Eastern Europe. They are confident that housing prices in this region will gradually increase, while the macroeconomics will only improve. But it is also worth noting that Eastern European countries are characterized by their shortage of finished real estate and, unfortunately, the pace of construction in these countries are not going to increase. That is why Russian investors need to pay attention to this market now, rather than wait for a few years, as more favorable conditions are not yet expected.