Estonia property and real estate news articles

This article was released in 'The Wharf'

Making money in Estonia property
Islander's Eastern European property empire
by Renato Castello

He's invested in East London, now Darren Goodson is looking further east to build on his property and real estate empire.

The 32-year-old Isle of Dogs resident has bought five apartments in Estonia's capital Tallinn and is now watching his investments skyrocket.

In one year one-bedroom apartments in the heart of the Eastern European city has increased from £42,000 to £50,000. And with prices in the picturesque area expected to increase 15 percent a year Darren say's he's on to a good thing.

"There are a lot of foreign investors buying there, working there and moving into the area - it is really a good area to buy to rent" the printing company director said.

"Next year I intend to buy 10 more apartments. I'm going into it big before it takes off, because it is still a quite little known market - people still ask 'Where is Estonia?' Nestled south of Finland, next to Latvia and Russia, Estonia became a EU member in 2004 and is profiting from foreign investment. Low interest rates, the strongest wage growth in the EU and Europe's fastest growing tourist market are helping to fuel property and real estate prices.

Darren is so confident in the market He has convinced friends and relatives to buy apartments and has written a book, 'Estonia -How to profit from one of the biggest property booms in Eastern Europe.'
In his book Darren spells out some of the tricks of buying in Estonia and reveals some of the mistakes he made.

"It's very difficult buying your first property, it took me seven months because investing from abroad everyone is trying to stitch you up," he said.
"Try and get everything in writing - I bought a kitchen, the guy gave me a quotation but before installing it he said it didn't include sinks or taps, so I had to pay extra."

If you want to order a copy of Darren Goodson's book visit www.tallinnproperty.com
Renato.castello@wharf.co.uk

This article can also be accessed at:
http://icthewharf.icnetwork.co.uk/thisweek/news/tm_objectid=15301420&method
=full&siteid=71670&headline=money-making-estonian-pads-name_page.html

This article was released in 'The Times'

The Estonia Express Investors
are packing their bags for Tallinn property 
to try to beat the rush
By Sarah Marks

Ask Darren Goodson to speculate on the next big thing in overseas property investment and he will put his money on Tallinn. So certain is the London businessman of a long-term property boom that he is liquidating a substantial part of his UK buy-to-let portfolio to invest in the Estonia capital. And he has convinced his brother, business partner and two other friends to buy there too.

They are not alone: When Ryanair and easyjet added the Baltic states to their schedules canny investors took note. Fly-to-let investors have already made their presence felt in Prague, and already budget airlines, whether serving the tourist or business market, now routinely feature in lists of key economic indicators drawn up by property investors evaluating distant lands.

Estonia's medievil capital is regularly promoted by the travel industry as the new Prague, but whether this tiny city of just 411,000 is the new property hot spot remains to be seen. Darren, who runs a printing and publishing business in the East End, has no doubts: he has bought three new one-bed flats just outside Tallinn's Old Town and plans to sell three of his eight London properties to buy another ten apartments in the city in the 12 to 18 months.

An amateur property investor even before he left home in Redbridge, Essex, at 21, Darren, now 32, spotted Tallinn's potential when he visited an old schoolfriend working in the country's telecommunications industry three years ago. His friend had fallen for an Estonian girl, but Darren was in the mood for finance, not romance. "At the time Estonia was on the verge of joining the EU, and by speaking to locals I found out prices of apartments were going up by 10 to 15 per cent."

Over the next 12 months he did his homework and he liked what he saw. Estonia's GDP grew by 6.2% last year, and the country's attracting large amounts of foreign investment, including substantial European Union grants for infrastructure projects. More than 250 subsidiaries of international companies have been established here since 2003, many from Sweden and Finland (Helsinki is just 1 and a half hours away by hydrofoil).

Much of the housing stock is poor, Soviet-era concrete blocks. With wages and living standards rising, the pan-Baltic estate agent Ober-Haus predicts that demand will easily outstrip the supply of new-build apartments.

A key indicator for Darren was the construction index, which rose by 6.2 per cent last year. "That's a good indication of a rising property market," he says. "Those building costs have to be passed on to the consumer, which means the price of new apartments will increase, at least in line with the construction index. This in turn should push up second-hand prices."

Darren also discovered that Estonian banks are willing to lend up to 95 per cent of a property's value, provided that monthly payments are not more than 40 per cent of take-home pay.

Darren, who lives in London Docklands, says his investment decisions are not emotional, but he is an avowed fan of Tallinn. "I liked it from the very first time I went there," he admits. "It's a beautiful place. They're very nice, friendly people, and they've got a good service culture. I like the village atmosphere of a small city - you get a feeling of importance there, whereas in London you can feel like a lost soul."

Wisely, Darren's choice of property reflects his experience in London. He reserved one-bed apartments in a new building in the fast- growing commercial and residential ring just outside the old city walls. Darren paid £45,000 for his initial 50 sq m apartments in 2003 and £50,000 for a further two. His brother Gary paid £61,000 for a similar-sized apartments a few months ago.

Darren put down a 25 per cent deposit and took out an interest-only mortgage with an Estonian bank for the balance. He spent £6,000 kitting out and furnishing each flat, which he hopes to let for £350 a month. After deducting bills of £500, mortgage repayments of £1,200 and agency fees, he believes he will be left with an annual profit of £1,700 on the two apartments he hopes to let; he is keeping the first for his own use.

Including capital growth of 10 per cent a year, Darren estimates that he will see a 35 per cent a year return on his investment, but he admits that there is some risk: his figures depend on letting the flats for at least 11 months of the year and his main rental market will be foreign workers or Estonians working for foreign companies. Agents suggest that this is achievable. He says

"I've been through ten years of property growth in the UK and I see exactly the same thing happening in Estonia. When I bought my first buy-to-let in the UK, friends said, 'You're mad, what if you can't rent it out?' But if you want to be successful, you've got to take risks."

If you want to order a copy of Darren Goodson's book visit www.tallinnproperty.com,
by Sarah Marks

This article can also be accessed at: http://www.timesonline.co.uk/printFriendly/0,,1-119-1587984,00.html

This article was released in 'The Mail on Sunday'

Why the road East is paved with euros
By Duncan Farmer

A decade after Communism, Eastern Europe is emerging as the property hotspot, attracting growing numbers of British investors. Poland and Estonia are leading the way, with recent entry into the EU fuelling economies which are growing faster than those in the West. Add to this a fledgling mortgage culture with low interest rates and it is no surprise house prices have been climbing 20 percent a year.

Estonia - A well-heeled English country set have been the unlikely property pioneers in Estonia, headed by the Marquess of Bristol, who bought an ancient manor outside the capital, Tallinn, three years ago.

He was drawn not only by the beauty of the country, its architecture and history, but also by its potential. He says: 'Estonia is a leading example of successful transition from communism to capitalism, and will be one of the first of the accession countries to join the euro (expected next year).

'It is also a world leader in technology. Ahead of most Western European countries'.

While these advances have driven wages and wealth, and fuelled the local property market, which has been rising at between 15 and 20 percent a year, it has also been boosted by its proximity to Finland - just across the Baltic sea. Estonia is a popular, and cheap, destination for Finns who have been buying holiday apartments for several years.

British owner-occupiers are a rarity, and most buyers, such as Darren Goodson, 32, from East London, are pure speculators. There are about 5,000 British owners in Estonia, and Goodson is so convinced about its potential that he has not only set up a website and written a book on the subject, How To Profit From One Of The Biggest Property Booms In Eastern Europe, but is also selling parts of his £3 million buy-to-let portfolio in the UK to enable him to buy more apartments in Tallinn. 'I Have bought six apartments off-plan so far,' he says. 'I paid £60,000 for each of them last year and they have gone up in value by 20 percent already. I will let them and next year I plan to buy ten more.'

This article was released in 'Aripaev'

Darren Goodson makes the
wheels on the real-estate market turn
By Sven Grundberg

Darren Goodson of London views Estonia as one of the best countries in the EU to do business. He predicts for Tallinn the growth in real estate prices for another twenty years. Having already eight apartments in downtown Tallinn, he contemplates buying a dozen more apartments to add.

The man who causes real-estate prices rally

Exaggerating a bit, one may say that Darren Goodson is one among those, causing the real-estate prices in Tallinn to continue their rally.

Goodson, coming from London is owner of eight apartments in downtown Tallinn; he has even written a book about the Tallinn real-estate market. He strongly recommends buying.

I am meeting with Goodson, 32 in the cafe Moscow. He has selected the venue of meeting. Darren creates the impression of a successful businessman, loving style. Although I have never seen him before, I recognise him at once. Black designer suit, black shirt and the hair fashionably entangled.

Goodson bought the first apartment when 21. "Father told me to move out of the flat and I faced two options: either to rent or to buy a flat", he says. "I understood that buying is more sensible". He shared his first flat with two girls, who paid him rent and thereby also his bank loan. He himself slept in the living room. After that Goodson has bought apartments every year thereafter.

He focuses on business, instead of girls

Goodson came to Tallinn a couple of years ago, when a friend of his become amorous with a local Estonian girl. Goodson himself was more interested in doing business in Tallinn than having affairs with Estonian girls. After collecting information and doing local market research for one year he was ready to buy his first apartments in downtown Tallinn.

"Estonia is one of the best countries in Europe to do business", he says in his heavy cockney accent. "There are three main reasons why I think that Tallinn real-estate market has large potential: firstly the growth of tourism, secondly innovative business climate of Estonia and lastly large foreign investments being sunk in Estonia."

Darren is content with his investments. The price of the first apartments bought in Tallinn has increased 19% in a year. He has bought seven more apartments in downtown Tallinn, however only one of them has been completed. According to Darren's estimates, the overall value of his Tallinn real-estate is nearly EEK 12 million. "I buy only off-plan apartments, in order to gain time. By the time the apartment is completed, I have bought the furniture, so I can let it immediately", explains Goodson. The furniture is rather commonplace. His first apartments in Tallinn, where he resides currently, looks like taken from a catalogue of an expensive sort. The only item betraying the idiosyncrasy of the resident is the half-empty pizza box.

After his visiting Estonia, the friends of Goodson took an interest in his activities. Therefore he planned to write a short report about his operations. However, the report evolved into a book and the consultation company Tallinn Property Corporation. "I wrote a book for self-realisation, seeking recognition", Goodson says after a pause.

He shows the newspaper clippings, reporting about him and his business. Goodson sells his advice and know-how via website Tallinnproperty.com for 2000 pounds. Isn't the price too high? Goodson answers that in the given moment there are too many clients and he has to decline a number of offers.

Goodson's long-term plan is to become so wealthy that he could retire in 10-15 years. He wants to buy, within the year 10 more apartments in Tallinn. "The problem is that there are too few new apartments coming to the market", the young man is complaining.

Goodson also has competitors - his countrymen. Other British real-estate companies have also been active in Estonian real-estate market for two-three years. "The prices are still so low in Estonia that our British clients do not need bank loans, in order to invest here", says Lee Williams, representative of Churchill Property. Churchill Properties has 30 real-estate objects in Estonia, with their main seat of activities being Pärnu.

Easyjet airline brings British real-estate buyers

David Laity, manager of another British real-estate company in Estonia explains that it is the Britons and the Irish who like investing in real-estate. He says that the investments of the Britons increased significantly in the autumn last year, when easyjet expanded its airlines to embrace Estonia.

In comparison with Andrus Ansip, PM of Estonia predicting the real-estate collapse Darren Goodson is exceedingly optimistic. He thinks that the prices in Tallinn real-estate market could increase at least until 2025, on average by 12% per year, in the first years of the period even 15-20% per year.

According to Hindrek Leppsalu, manager of the real-estate company Oberhaus, the above estimate is reasonably motivated. In the past year the prices of residences in Tallinn hiked by 9%, in downtown by 11%. Leppsalu adds that the foreign investors like Darren Goodson affect the Tallinn real-estate prices especially apartments in downtown, where their activity is more impetuous.

Lee Williams, representative of Churchill Property is also positively tuned. He says that the introduction of euro will be another engine of price hike. "The Spanish real-estate market went mad, because people had to invest their cash savings", he says. "I think that the same thing may happen in Estonia".

In the day I meet Darren Goodson, the temperature in Tallinn is 25 degrees above zero. After the meeting, Goodson will go to accept furniture for his second and third newly completed apartments. The rapid growth in real-estate prices does not allow him to indulge in sightseeing or pleasures of the beach.

This article can also be accessed at:
http://www.aripaev.ee/2913/uud_uudidx_291302.html

This article was released in 'Äripäev'

Tallinn's real estate market to keep
growing for at least 10 years
by Darren Goodson

After studying the property market in the UK I began to research the potential within Estonia, before it joined the EU. I found Estonians to be very similar to the British when it comes to housing. We have one fundamental common factor: We both have a passion for owning one's own property, rather than renting.

I found that since 2003, the Tallinn real estate market has been booming. Many property investors have asked me what is causing this to happen, and how long it can this continue. I believe it will continue for at least the next 10-20 years, maybe not at the same pace but it will certainly continue to increase. There are 10 fundamental reasons for this.

1 - The rising Construction Price Index - The index for Q1 2005 compared to Q1 2004 is up 8.4 percent. This will inevitably have an effect on new property selling prices, especially apartments.

2 - Funding, to the tune of 695 million euros, is pouring into Estonia since its integration with the EU, with another 5.1 billion euros to follow.

These funds will be invested in the country's infrastructure, including roads, airports, hospitals, education and general improvement of people's standard of living. This will lead to more jobs, expanding businesses, higher consumer spending and more property buying.

3 - Tallinn receives 81 percent of all foreign direct investments (FDI). FDI is booming, leading to more businesses opening and more jobs created, which in turn, will lead to more people buying and renting property, mostly by foreign bosses and managers setting new enterprises and head offices in the area. In fact, the FDI in Q1 2005 exceeded the whole of 2004.

4 - Size really does matter. The Global Growth Competitive Index has ranked Estonia 20th of 104 countries in the world, higher than any other Eastern European country and higher even than Hong Kong, which ranks 21st.

Estonia's small size is its best strategic advantage over the other new EU member countries. Why? Because its small size makes change easier to implement than the bigger, more cumbersome, countries like Poland or Czech Republic.

5 - Strong domestic demand. Developers built 1,100 units in 2002. Another 1,800 were completed in 2003 and around 2,000 in 2004. Ober-haus, the real estate agency, is expecting demand to outstrip supply. They estimate Tallinn can absorb between 2,200-2,500 new apartments per year.

Housing loans in Estonia total only 11 percent of annual GDP, compared to the EU average of 48 percent. Per capita living in Estonia is 26m2 which is half the EU average.

6 - Low interest rates. Between 1995 and 2005, interest rates have fallen from 12 percent to their lowest ever, 2.8 percent.

Low interest rates mean greater affordability and opens up accessibility to a much larger share of the populations where at one time buying was out of reach.

7 - A growing economy. Estonia has produced an average GDP for the past four years of 6.23 percent, while maintaining a low inflation rate of just 3.1 percent during 2004.

8 - The country itself. Estonia is officially Europe's fastest growing country in terms of tourism. Foreign accommodated tourism in Estonia increased by 30 percent in 2004 compared to 2003, from 1.05 to 1.36 million tourists, making it Europe's fastest growing tourist destination.

Increasing tourism means more new businesses, more new jobs generated, and more people available to buy and rent property.

Tallinn is a potential tourist destination that is about to explode over the next ten years.

9 - Fly-to-let investors - Savvy property investors from Sweden and Finland have been investing in Estonia for several years. Due to their location, they have been closely linked to what's been happening in the area.

However, property and real estate investors from Western Europe are not far behind the Scandinavians. They are now beginning to realise the potential in Eastern Europe and are beginning to diversify their assets into this high-growth investment market.

With the stock market and pension funds failing many people, investors also are keen to put their money into more solid ventures, even if it means investing it overseas.

10 - Property prices will increase in line with wages, which are increasing 10 percent a year. At the moment Estonian wages are just 20 percent of the EU average.

If Estonian wages and salaries continue to increase by an average 10 percent per year, as they have during the previous five years, they will double every seven years. It will take 20 years for wages to rise to the current level of the EU average.

This is another very important indicator, in addition to the construction price index. Why? Historically in the UK, house price inflation has consistently increased at slightly above wage inflation. Over the last 30 years, UK average earnings have increased by 9.0 percent per year, compared to the 8.4 percent annual growth in house prices

Some people ask if prices are already too high. I say no way! Estonian property prices have the potential of doubling within the next three to four years and tripling within the next ten. Some may say this forecast is a little on the optimistic side. I say look at what the UK housing market has done over the last ten years.

Darren Goodson has also published a book on Estonia and its real estate market titled 'How to profit from one of the biggest property booms in Eastern Europe'.

This article can also be accessed at:
http://www.aripaev.ee/2972/arv_kolumn_uus_297201.html

This article was released in 'EasyJet Magazine'

"Darren Goodson - Smart Investor" - EasyJet Magazine

by Kate Hamilton

Darren Goodson has been a property investor for the past 10 years in the UK. "With the British market slowing down I thought the time had come for me to venture into foreign property investment, and having visited Estonia-and been mightily impressed with it-it seemed like the natural choice."

Darren started researching the Estonian property market before the country joined the European Union and, as a result, saw the potential for capital growth. "It seemed obvious to me that once EU accession had been achieved the low-cost airlines would start flying to the capital cities of the Baltic nations," explains Darren. "The combination of EU membership and budget flight routes was bound to push up the property prices in Tallinn."

With this in mind, Darren bought his first apartment in 2003. But the question is, was he right in his presumptions? "Well, prices have gone up 20% this year alone," says Darren. "That's not a pie-in-the-sky figure either-it's a fact."

Darren Goodson started researching the Estonian property market before the country joined the EU. It's a good job that this smart investor has since added seven new properties to his portfolio then. "Six of these are yet to be completed," Darren adds, "but I now have two apartments that are up and running which I rent out to tourists." And with the tourism market having increased by 35% in 2004, this is probably a rather good move too.

Another advantage of short-term lets is that it frees up one of the flats for a few days each month when Darren comes to stay. "You need to visit at least once a month otherwise you lose touch with the local market," concludes Darren. And in touch he is. In fact, Darren's investments have been so successful that he has even written a book on the subject: How to profit from one of the biggest property booms in Eastern Europe (see www.tallinnproperty.com).

This article can also be accessed at:
http://easyjetinflight.com/features/2005/nov/property.html

This article was released in the daily "Postimees"

The British businessman promotes Estonia
as 'property paradise'

by Kaire Uusen

Darren Goodson invests, as he positively informed, only in the new apartments of downtown Tallinn. Photo: Peeter Langovits

"My long-term analysis shows that the real estate prices in Estonia, specifically in Tallinn, will increase at least in-line with the rise in salaries, which amounts to ca. 11% per annum," says Goodson, basing in his forecast on economic indicators of this country and also on experience of Great Britain.

There, the real estate prices moved, in the past 30 years, at the same rate as the salary hike did. "The similar trend can be anticipated also in Estonia, although due to extremely few offers of new buildings I presume that the real estate will appreciate in 2006 by 25-30 percent and in 2007 by 20-25 percent," is Goodson boldly tossing off the promises.

Yet, Goodson emphasises that in order to earn money, one should know exactly what apartments should be bought, and in what districts, because the mindless investment needs not yield the coveted income.

Goodson himself has bought, in the couple past years, in downtown Tallinn ten new apartments and has, thanks to the boom of the recent years, earned back the invested money with a surplus.

This year, he plans buying another batch of ten apartments, but not in the Old Town or the uptown (fringe of the town), but only in the new high-rises of the centre of town (downtown), because it is there he perceives the real perspective.

He found himself in Estonia, in the first time in 2000, when a friend of his married an Estonian woman. It was not however the ladies that caught Goodson's eye, on a visit to his buddy, but the real estate.

Unlike many men of property, he does not keep his success to himself, but kindly offers advice to others, in his handbook.

This British man is not at all surprised, when his prognostications are taken with a pinch of salt. Goodson admits that he is often asked why he is assured of continuing rise of Estonian real estate prices.

"When some analysts say that the prices are already too high, I reciprocate by asking the question, why they could not rise further," explains Goodson, who has determined, basing on analyses, 12 fundamentals supporting the current real estate market.

"I see that the boom will continue while all these economic indicators remain positive. Those are facts and not conjectures," he underlines. One of the reasons is, for that matter, low wages level in Estonia, which is sure to move to meet the European level.

As assured by the British man, his handbook is successful. "In addition to the British, a quarter of those ordering the book are foreigners, mainly the Irish," Goodson explains. "Currently I sell 25-30 books per month. It can only be ordered through Internet."

Thanks to the amazing success of his book, the businessman started providing to his readership a reference service, helping to pinpoint real estate in Estonia.

This man having earlier operated in the area of real estate in his home country visualises his business as going on specifically here, in the future. "Great Britain does not any longer offer an opportunity to real estate investors like me, to earn big profit," acknowledges Goodson.

In his opinion, all countries of East Europe befit for investments, but he considers Estonia as the best place.
"I have worked in many countries, but nowhere do I feel as good as in Estonia," says the man, who can invariably be seen walking in downtown Tallinn at least once in a month.

This article can also be accessed at:
http://www.postimees.ee/150406/esileht/majandus/198178.php

Darren Goodson - Property King

As featured on Overseas Property TV with John Daley, 20^th November 2006

Darren Goodson features in the Overseas Property TV's 'Property Kings', the programme that interviews entrepreneurs who have shown exceptional skills and experience in the property business.

12 reasons why property and real estate prices will boom in Estonia - for the next 20 years and beyond...click here to read more...