After our in depth look at dubious building developments in Eastern Europe, Forbes magazine has jumped on the band wagon and gone a little up market. In that vein, we decided to present some of the most expensive properties in Eastern Europe. Some are currently for sale, some are just in need of an idea to turn them into money makers and some are just plain expensive.

Sotheby’s International are offering this gem on the “Cote D’Azur of Baltics,” Latvia. Price undisclosed.

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Kiev Ukraine - Place de l’Indépendance [Photo credits to Panoramas on Flickr]

Some might ask if ‘coming of age’ was a good thing as far as property investors are concerned; the answer is probably ‘yes’. Ewan McGarrie of propertyinvestment.co.uk recently described the East European city centre market as ‘large and stable’ and particularly highlighted Budapest as a stable residential market with good capital appreciation prospects. Yesterday we juxtaposed the possibilities of much smaller Zagreb with Croatia’s Adriatic coastline and made the point that Zagreb, as the capital city, is drawing in the country’s professional ‘cadres’. However, there is a bigger story to tell in the dynamic economic prospects of Eastern Europe, which have been largely overshadowed by commentators concentrating on the BRIC (Brazil, Russia, India, China) economies. Unlike Russia and China, East European businesses are well placed for attracting the profitable, well-paid (development and marketing) ends of the “smiley curve” as well as the less remunerative manufacturing.
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The International Herald Tribune (IHT) reports that the residential property market in Prague has matured and no longer the attraction of gold field for property investors. The article says that annual returns at 5% are still a little higher than for Western European markets and that the Czech Republic presents some sound investment propositions, especially at the higher end of the property range. This contrasts with the rosier picture painted by Property Secrets in mid-January which forecast growth rates of 20% for Prague and 15% for Brno ( the country’s second city) in 2007. The RICs report (pdf)on European residential property confirms that the high end of the market is the most promising - note that the Czech republic has had the lowest level of house price inflation among smaller European countries in 2005/6). Mortgage rates are currently at around 3.8% for a one year fixed rate mortgage or 4.45% for a five year fixed rate mortgage. The country’s interest rates trend is very uncertain with the possibility of further rises to stave off inflation and a further slide against the Euro (read Bloomberg article here). Mortgages are available in Euros or Crowns (Czech Koruna) but, given the exchange rate situation, a local currency mortgage may be a safer commitment. The longstanding legal requirement for foreigners to purchase property by means of a Czech registered company is now being repealed to meet EU requirements.

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