Moldavia, Lithuania, North Macedonia best for property investment

A study by UK insurance company William Russell suggests Central and Eastern European countries offer the best European property investment opportunities in 2025. 

Residential

Moldova tops the list due to low purchase costs, a 12% rental income tax, and high rental yields, driven by development in its capital, Chișinău, which has experienced consistent growth in infrastructure, hospitality, and business. This progress, combined with increasing tourism fuelled by the wine industry and cultural attractions, creates promising prospects for short-term rentals.
Lithuania holds the second-best position for property investment. Eurostat data shows a nearly 10% year-on-year price jump in the final quarter of 2024, a trend expected to persist. Despite this sharp recent price growth, foreign buyers remain attracted by unrestricted property purchases and high rental prices, which have surged over 170% since 2015. The report highlights Lithuania's attractive 6.39% gross rental yield and maximum 4.10% buying costs, predicting steady price growth and good returns.
North Macedonia ranks third for property investment. Its capital, Skopje, is undergoing urban expansion and infrastructure improvements, driving demand for both residential and commercial properties. Low taxes, a streamlined property acquisition process, and government incentives for foreign investors further enhance the appeal. The report also notes North Macedonia's strong 6.47% gross rental yield.
Other promising countries with high rental yields (over 7%) include Serbia, Ireland, and Latvia. 
High rental prices in Ireland contribute to high yields for property investors, but significant taxes can reduce net income. A housing shortage, driven by insufficient construction to meet growing population demands, continues to push prices upward.
Andorra, Montenegro, and Bulgaria boast high yields and relatively low rental income taxes. 
While Italy's 21% tax rate is somewhat high, its impressive 7.56% rental yield results in the third-highest rental return rate, making it a potentially attractive investment depending on individual investor objectives.
The study emphasizes the importance of considering factors beyond yield and taxes, such as vacancy rates and market conditions.