Interesting comparison of various emerging markets. I am surprised to see that things maybe not as bad as predicted in Bulgaria.

Rachel

This is the most helpful article I have seen for some time on the weekly newsletter..
Would be interested to see some more support data on prices per market in the key markets as a table and a similar review of rental rates / yields.

Estonia tends to get grouped together along with its other Baltic neighbours Latvia and Lithuania. In fact Estonia has much closer ties with its Nordic and Scandinavian neighbours.

The IMF has said that because of Estonia's reserves, it is in the best position amongst Baltic countries and is less vulnerable than its neighbours due to the government having kept a budget surplus for several years.

Also, the current account deficit for the fourth quarter of 2008 was the lowest in three years and amounted to EEK 3.3 billion, or 5.5% of the fourth-quarter GDP.

March 2009 inflation figures showed this has fallen to 2.0% year-on-year, after reaching a peak of 11.4% April 2008, yoy, the lowest of the Baltics, with Lithuania it was up 7.7% and in Latvia 8.2%.

A report “European Cities and Regions of the Future 2008/2009” conducted by the Financial Times in September 2008 highlights Tallinn as the no.2 top ranked European Cities for development potential ahead of London and Paris.

The same report also puts Tallinn at no.9 in Europe in terms of cost of doing business.

Estonia has a unique, competitive and simplified tax system for both individuals and companies.

Corporation tax is zero (0%). This means all company reinvested profits are free from tax.

Personal income tax and tax on dividends is currently 21% in 2009, this will reduce by 1% each year until 2012 until it reaches 18%.

There's no doubt that Estonia has been hit hard in this recession. GDP is expected to decline as much as 9% this year, although experts believe the economies in all the Baltics should stabilise in 2010 and return once more to (modest) growth.

Estonia is also best placed in the Baltics to adopt the single Euro currency. It hopes to meet all criteria for adoption by later this year, and it is possible Estonia may be able to adopt the Euro from as early as July 2010 or Jan 2011.

Interestingly also, in Tallinn, they are currently investigating the possibility of Estonia becoming a financial centre. Estonia would be well placed to offer niche financial, banking services especially to its Nordic, Scandinavian neighbours as well as possibly Russia. Just yesterday, the chancellor of the Ministry of Economic Affairs and Communications in Estonia, signed a cooperating agreement with British economy experts from firm Oxera Cosulting Ltd., to investigate Estonia’s possibilities to develop financial services, the Ministry announced. (quote from Baltic Business News)

The impact and wealth this would create would be substantial. Look at Zurich, Luxembourg as financial centres (both relatively small cities). If they could replicate that in Tallinn, the consequences would be huge. And, more relevant here, the effect this would have on property prices?

It did not seem my smartest initial move to invest in the bombed out Berlin market, which has not been a fantastic money earner either. However Berlin is far safer than anywhere in post-communist CEE- prices have not dropped at all because there simply was depression rather than a bubble in the market