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Vilnius

The current state of the property market in Lithuania could be considered as a huge success story in the evolution of the Lithuania nation since admission into the European Union in 2004. Largely, the success story revolves around the capital city, Vilnius.

Vilnius is a traditional, historical eastern European capital city, which was controlled by a Soviet regime until recent times. The soviet regime has played some role in the somewhat ugly architecture of suburban property developments; however, this is changing after huge economic growth rate. In fact in 2003, Lithuania had the highest economic growth rate on the European continent. When this is coupled with a zero inflation rate, it provides for a buoyant property market, which is set to grow because of the consistently high Gross Domestic Product from Lithuania over the past 5 years.

Apartments in the centre of Vilnius have been known to double in price on an annual basis and new property developments are selling out before completion of the properties.

Rental yields are in the 10% range with an emphasis on 1-2 bedroom apartments for overseas businessmen.

Although property prices in Vilnius are growing at a tremendous rate, analysts still believe that property is undervalued in the area and that there is room for further growth due to the positive Lithuanian economy. It would appear that the largest obstacle towards investing in new property in Vilnius at this time is not price but availability. Many new properties are currently being sold months if not years prior to the completion of building work.

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