The best European countries for real estate investments in 2025: The Balkans at the top!
The best European countries for real estate investment in 2025 are in Central and Eastern Europe, with Moldova at the top. The Balkan country earned the highest score in a new study that scans the best property investments in Europe, according to British insurance company William Russell.
They took a closer look at key elements of property investment, including property tax rates, rental income tax and gross rental yield. In a previous study by British relocation company 1st Move International, Lithuania appeared to be the top choice. In the current list, the Northern European country earned second place, trailed only by North Macedonia.
Moldova was called "a high-yield emerging market for early-stage, risk-tolerant real estate investors" in the study, which found that property acquisition costs are a maximum of 2.80% of the price and income tax is 12% on rent, offering a high rental yield rating.
The country earned a high ranking due to its capital, Chisinau, which has seen steady development in the infrastructure, hospitality and business sectors in recent years. This, along with growing tourism, driven by the country's wine industry and cultural heritage, offers short-term rental opportunities. However, the country is not part of the EU, currently a candidate to join the bloc.
Lithuania ranks as the country with the second best opportunities for property investment. Property prices rose by almost 10% in the last three months of 2024 year-on-year, according to Eurostat, and the trend is likely to continue.
Despite the significant increase in real estate prices in recent years in the country, the location is attractive to foreigners, as they are not restricted from purchasing property in Lithuania. Rental prices are also attracting investment as they are high in the country, more than 170% of what they were in 2015.
"With a gross rental yield of approximately 6.39% per annum and a maximum of 4.10% of purchase costs, Lithuania's moderate growth rate means that property prices are likely to increase steadily over time, providing a good return on investment," the report said.
North Macedonia, another EU candidate country, was ranked as the third best option. The capital, Skopje, is experiencing urban growth, infrastructure improvements and increasing demand for residential and commercial space.
The country offers low taxes coupled with a simplified process to purchase property, and there are government incentives for foreign investment. According to the report, North Macedonia also boasts a gross rental yield of approximately 6.47% per year, indicating a strong return compared to the value of the property.
Where else in Europe are there good property investment opportunities?
According to the study, Serbia, Ireland and Latvia also promise "very good" yield ratings, with annual gross rental yields of more than 7%. In Ireland, high yields are largely guaranteed by high rental prices, but high taxes can significantly reduce annual net income. The country is facing a housing crisis, as not enough homes are being built for the growing population, while prices continue to rise sharply.
Countries with the highest gross rental yields, coupled with a relatively low average tax on rental income, include Andorra, Montenegro and Bulgaria. Despite having a slightly higher tax rate (21%), Italy has the third highest rental yield due to its high yields (7.56%), which can be attractive depending on the specific investment objectives.
"While gross rental yield and average rental income tax rate are important factors in the analysis of property investments, it is important to consider other factors such as vacancy rates, property management costs and local market conditions ," the study said.
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