Investing In Property In Lithuania

by : Tem Pearson

Although Lithuania may not be one of the economic leading lights in Europe, this does not mean that the property market in this promising country should be overlooked. Lithuania is most certainly on the up and recent figures have done nothing to dampen the enthusiasm of investors.

Last year, the cumulative foreign direct investment in Lithuania topped 4 billion Euros, the highest figure yet which shows that confidence is at an all time high for this small country.

Investing in property in Lithuania is still a reasonably young market, with precious few developments being built and the re-sale market being relatively slow, making it a perfect time to get into the market, before the masses discover this hidden gem.

The capital of Lithuania is Vilmius and this has been one of the first regions to attract investors; the average price of apartments in the city centre has risen by between 15 and 25 percent, in just one year. During 2005, 2,200 new apartments were built in the centre and almost all of them were sold before they were even completed. As a result of this enormous demand, a further 2,600 apartments are planned for 2006.

Part of the reason for this incredible demand is the high level of education of the local workforce. Lithuania has the highest number of university graduates per 1000 population of any country in the Baltic region. With this level of education comes a workforce that is affluent and demanding in terms of quality housing. Consumer spending is also increasing at a rapid rate in Lithuania, which is also fuelling the property market.

As well as the booming city market, there are also plenty of countryside retreats that are starting to attract investors. Although the markets in these regions are not as developed as those in the city, there are, nevertheless, still plenty of bargains to be had. The rural scenery in Lithuania is nothing short of spectacular with more than 4,000 lakes and enormous forests as far as the eye can see.

Throughout the country, new commercial and recreational sites are being built at an impressive rate, resulting in numerous opportunities for property investors. Tourism is not huge in Lithuania, although this is likely to change in the near future, as Lithuania hosts some of the most important European events.

One of the key events likely to raise Lithuania's profile is the naming of Vilnius as the European Capital of Culture for 2009. This amazing profile raising event is likely to ensure that house prices soar and keen investors would do well to beat the rush, thus profiting from this likely boom. In 2011, Lithuania will also be hosting the European Men's Basketball Championship which is likely to raise the profile of this country further still.

Culturally, Lithuania is an interesting mix of western and eastern cultures, with the populated cities shifting more towards western cultures and the more remote parts of Lithuania retaining the eastern European rural charm.

Foreigners are able to purchase property freely in Lithuania, which should ensure that the property market remains buoyant for years to come. However, investors should be aware, that land cannot be purchased in Lithuania, without the prior approval of the local municipality.

There is no denying the potential for investing in property in Lithuania. It is a good idea for anyone looking for impressive capital growth and strong long-term rental yields. Lithuania is likely to become one of the next big property hotspots in Europe - so get in there quick, before the crowds beat you to it!