October 24, 2008
/EIN Presswire/ -- World-Estate.com : The Characteristics of the Post Soviet Real Estate Market
News.World-Estate.com
After the regime of the Soviet Union had collapsed in the eighties, Eastern European countries started building up democracy. Gradually changing into market economy, young countries had to return the property (nationalized by the government before) to the rightful owners. Also national companies which had many Real Estate objects OA were privatized. The "World-Estate.com" reminds that these were the conditions under which a so called Real Estate market developed.
This market is different to the one in the Western Europe by the fact that Western countries had many economically strong urban centers since the Middle Ages. Eastern Europe which was the agricultural part of the continent for a long time had laid the foundation for modern cities only because of industrialization which has been developed by the communist government. After the Second World War crowds of people started moving to towns for the search of new jobs there.
Sudden flow of inhabitants has escalated accommodation problems. These were considered only in the sixties when suburbs with many blockhouses were built. Flats had to meet the need of accommodation. Several generations grew up in these apartments though after the change of political situation many people started dreaming of better living conditions and quality.
Building of new more comfortable flats started which made the price of older Real Estate buildings to drop. Respectively, the price of newly built flats started growing despite the place of the house. What mattered was not a prestige place, but better living conditions. However such situation in the market did not last long as the stratification of the society started.
Eastern and Western Europe differs in the fact that city centers are not considered to be prestige areas while in the Eastern European countries prices tend to be the highest there. What is more, in the Western European countries supermarkets are in the suburbs while in the Eastern European countries shopping molls tend to be built in the city centers - instead old factories. This is reasonable - “eastern” Europeans still feel attracted to the mass meetings in city centers. Before, markets and other events were placed there.
Nowadays, city centers are mostly visited places in Eastern Europe with many coffees, restaurants, exclusive shops and tourist sights there. Thus going trough the "World-Estate.com" database of Eastern Europe one could see the prices of Real Estate objects tend to exceed the prices of similar objects in the suburbs.
Another characteristic of these markets is the following: many wealthy inhabitants who have a perfect flat in town tend to buy a place in the suburbs which mostly often is in some picturesque place: near the lake or the see, with beautiful horizons. The prices of such places sometimes might event exceed the ones in Western Europe as the supply of such Real Estate objects does not exist.
Since 2004, when the Eastern European countries joined the European Union, foreigners were not allowed to buy Real Estate objects there. At the beginning investors were distrustful. However, they started making investments in Real Estate objects after noticing high economical growth in these countries. This step had influenced the rural Real Estate market as the prices started growing out of proportion.
However, recently the situation has been taken under control and speculations in the Real Estate market stopped. Now as the international economic crisis shakes the world it is hard to foresee the future. It is not a secret that many young Eastern Europeans still lives with parents or rents instead of buying a flat because they are waiting for more favorable prices. We'll see if the market offers it.
For more information please contact:
Simonas Rudaminas
WORLD-ESTATE
World-Estate.com project manager
Mob.: +370 656 88777
Email:
info@world-estate.com
www.world-estate.com
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