On what the investment attractiveness of the Ida-Virumaa territory depends
The Estonian real estate market is in stagnation. In order to increase the interest from investors, the country’s authorities have developed a special program, which will help the development of several regions. The first changes will affect Ida-Virumaa, as today the investment attractiveness of the territory is extremely low.
The difference in the cost per square meter in the Estonian capital Tallinn and Ida-Virumaa made the authors of the program pay attention to the region. The prices differ almost 10 times, which is critical for the market and the country as a whole.
The formation of real estate prices is influenced by people’s financial capability, their interest and desire to live in a particular region or city. Tallinn opens up great opportunities for citizens; the demand for objects here is extremely high, which leads to an increase in the price per square meter. The Ida-Virumaa cannot provide such conditions as the capital, which means that the demand for housing in the region is extremely low. This leads to the fact that the territory is developing slowly, it is not interesting for investors, and local business is growing weakly.
The reasons for this picture are several factors. These include the low wages in Ida-Virumaa and the high unemployment rate. Residents cannot afford to buy an apartment due to lack of available money. As a result, there is low activity on the local real estate market – people do not consider buying objects as an investment.
In order to develop the region, the Estonian government decided to develop a strategy for Ida-Virumaa. Next year, 5.1 million euros will be allocated to this area as part of the investment attractiveness program. About 17 million euros have been allocated for the project implementation, which will be used for the development of different regions of the country. The authorities plan to invest about 17 million Euros in the North-East region by 2022.
The points of the program for increasing investment attractiveness include the liquidation of apartment buildings that are empty. In addition, measures to reduce unemployment are being developed and the first results have already been achieved. In a relatively short period of time, 130 new jobs have been created in Ida-Virumaa. This was achieved with the opening of the Estonian Language House, the Vaba Lava theater center. As a result of the transfer of the Integration Office to Narva, employees from other regions of the country have moved to the region.
Local companies also joined the program to increase investment attractiveness. With government assistance, they were able to expand their staff and offer new jobs to residents.
It is also important to increase the inflow of domestic tourists. To this end, they are developing advertising campaigns aimed at raising public awareness about Ida-Virumaa and its attractions.