Here is the key that will help you decipher all of the statistics we’ve compiled:Country
What is it?: Fairly self-explanatory, we hope. As well as the emerging markets, we have also listed data for the UK, Ireland and Spain for comparative purposes.
What is it?: On the Capitals statistics, we list in most cases the capital city of each country. The only exceptions are Morocco and Turkey, where we list Marrakech and Istanbul instead of the actual capital cities, as these are currently the most popular areas for foreign buyers.On the Resorts statistics, we have listed just one of the most popular seaside resorts in the country (or lakeside in the case of Hungary) as a guide. This certainly does not mean that you shouldn’t consider any other resort than the one we’ve listed as you should look at all of the resorts a country has to offer for the best locations, just as you would look at all of the different districts in a city.
What is it?: It is the average cost to buy one square metre of property of the type that we recommend as making a good jet-to-let property.
What’s it good for?: It will give you a good indication as to the overall price of a good property in the city if you multiply the price by the size of the apartment you’re planning on buying. So, if you are looking for a 60 square metre apartment at a price of EUR2500/m2, you can expect to pay something in the region of EUR120,000 for it.
As in any city, prices are based on a huge variety of factors, so we have tried to go for an average figure somewhere in the middle. It is a guide figure only – in each of the cities you will probably find some reasonable properties on sale for 50% less than the price we have given and others that are 50% higher. We have tried to be consistent in order to make it easier to compare one emerging market with another.LTV
What is it?: It stands for ‘Loan to Value’. It is the maximum percentage that a lender is likely to give you as a mortgage on the property. So if you were buying a property worth EUR100,000 with a mortgage having a maximum LTV of 80%, you’d need to come up with EUR20,000 of your own money as the maximum that the bank would lend you is EUR80,000.
What’s it good for?: You need to know this figure for several reasons as it will tell you how much of your own money you will need to buy a property. High LTV markets are good as you can get more property for your money. Say you had EUR50,000 to invest and are buying properties worth EUR100,000. In a market with a maximum LTV of 50%, you could only buy one property. But in a market with a maximum LTV of 90% it means you could buy five properties – making you five times as much money providing the markets go up and not down.
Of course, if you can do this, then lots of other people can do it too. The result is that the prices of property in markets with high LTV’s are likely to rise faster than those with low ones, as more people will be able to buy property there.Interest
If the figures for mortgages are written in red, it means that it is currently not possible for foreigners to obtain mortgages locally, meaning that you will have to come up with your financing outside the territory - such as by remortgaging a property in your home country, by finding a mortgage broker who is able to arrange financing or by investing your life savings, perhaps.
What is it?: This is the rate that you will need to pay your bank in interest payments each year. In most of the emerging markets, it’s not possible to get interest only mortgages, so each year you are also going to have to pay a big chunk of the ‘principal’ – the amount that you originally borrowed.
What’s it good for?: Before you run off and start buying multiple properties at 90% LTV because you have the other 10% all ready and waiting, you need to make sure that you can afford the monthly repayments or else you’re going to go bankrupt very quickly. The interest rate is one of the key factors you need to know in order to work out what your monthly payments are going to be.
Note that the majority of mortgages in Eastern Europe are issued in Euros and are based upon EURIBOR plus a certain percentage. EURIBOR (Euro Interbank Offered Rate) is the rate set each day for lending and borrowing Euros. You can find out the current EURIBOR rate in our Tools Section. If the European Banking Federation which sets the rates put up interest rates in future, your mortgage is going to cost more.
As is the case with high LTV’s, low interest rates mean that more people can afford to buy their own property and so, the lower interest rates are, the more property prices are going to increase.Duration
What is it?: It is the maximum time period over which you can pay back the loan.
What’s it good for?: The longer the period of the loan, the less of the principal you need to pay back each year. For example, if you have a mortgage over 10 years, it means you need to pay back 10% of the loan each year. If you have a mortgage over 40 years, you only need to pay back 2.5% annually. So it can make quite a difference.
If you know the total price of the property, the LTV, the interest rate and the duration of the loan, you can work out the total amount that you will need to pay each month. You can do this easily by going to our Tools Section and inputting the data into our Credit Calculator.
One final note about the mortgage data: as is the case with the banks in the UK or elsewhere in Western Europe, no two banks offer exactly the same deal when it comes to mortgages and so the three variables here will always vary from bank to bank. Your personal finance situation will also have a major bearing on what type of deal you can get. So it’s worth shopping around in order to get the very best deal – either by slogging around all of the banks yourself, or using the services of a mortgage broker.
Statistics Explanation 2 >>>