Ober-Haus is the largest and only real estate agency operating across the Baltic and Central European region including Poland, Estonia, Latvia and Lithuania

Ober-Haus is a highly experienced provider of property asset services and has, since 1994, grown to employ over 300 real estate professionals in more than 30 offices.

We have seen increasingly strong demand for residential units across the region, these countries sell themselves, add our service to the mix and you can see why. Residential prices have grown by over 15 percent each year for the last five years. However, prices are still on average one quarter what they are in Western EU Capitals. Prices need to grow another 300 - 500 percent to equalise.

The key drivers behind growth in these markets are a combination of the following.

Convergence – they start as the poorest members of the EU yet have the highest growth rates. Latvia, for example has GDP per capita of €8,249, just 39 percent of the EU average, making Latvia the poorest country in the EU. However, Latvia is also the fastest growing economy with annual GDP growth reaching 11.4 percent (3Q 2005).

There is also an extreme shortfall in supply of new units coming onto the market, just 15,000 units were completed in Warsaw in 2005, with existing demand and a further 50,000 plus people coming into the city every year prices are set to rise for many years to come.

Wage Growth in Estonia topped 10.9 percent in 2005, an increase in personal wages and purchasing power is driving asset prices up. Wage growth coupled with growing loan liquidity has influenced spending power, mortgages as a percentage of GDP was just 4 percent in Poland in 2005, compared to the EU average of 48 percent, this suggests a lot more liquidity is still to come pushing prices even higher. Unemployment levels in Estonia are just 6.9 percent, and 7.1 percent in Lithuania.

Another factor influencing demand is the low but growing living space per capita. Central and Eastern Europe has the lowest living space per capita in Europe. The average residential space per person in Riga is just 22.7 sq.m, compared to an average of 36.6 sq.m in western EU countries. This suggests Riga will need another 10.2 million sq.m of residential space.

Low Tax and Liberal economies – all four countries have low tax regimes and pro-growth governments. Estonia has no corporate income tax on undistributed profits, allowing capital to appreciate rapidly. Latvia has a low 15 percent corporate income tax rate. Lithuania and Poland have low tax rates of 19 percent on corporate income.

Investing in the region has never been easier, not only is the buying process very straightforward but the services are now in place to cater for even the most sophisticated investor. Ober-Haus now offers clients a hands-off investment opportunity, from sourcing the properties, finishing the properties, including kitchen and bathroom, finding a tenant and finally managing the property. Our dedicated property management team provide 24 hour assistance to tenants and landlords and send monthly management statements to each client. To satisfy client demand Ober-Haus plan to open offices in the Ukraine and Romania in the coming months.

For more information on investing into residential property in Central Europe, call David Rice at Ober-Haus Property Advisors on +48 502 10 50 30, or email: david.rice@ober-haus.com; website: www.ober-haus.com