Antony Tilney’s property portfolio reads like a Ryanair departure board: Katowice, Cracow, Brno – name any of those eastern European cities that few of us can pronounce properly, let alone have ever visited, and the former IT consultant has either already bought property there or considered doing so.

Since May 2004, when he acquired his first flat in Prague, Tilney, 38, from Farnham, Surrey, has snapped up no fewer than 32 investment flats in the new European Union member states. The properties, from Latvia in the north to Cyprus in the south, cost him a total £2.7m (of which he has £2m worth of mortgages).

“I’ve got 10 in the Czech Republic, 10 in Poland, two each in Slovakia and Latvia, three in Romania and five in Cyprus,” he says, pausing as he struggles to remember the location of one of his more esoteric purchases – a glance at his spreadsheet reveals it to be Swinoujscie, a Polish port town near the German border. “If I sold them now, I would get about £3.3m. But they’re my pension. I’m hoping that in 10 or 20 years’ time, they will have tripled in value.”

Tilney, who gave up his job to concentrate on his portfolio, bought his most recent property in Katowice, in southern Poland, in June, but is not planning further large-scale acquisitions, as he is at the limit of what he can manage on his own. “I’m not thinking of buying another 10 any time soon, but I will probably pick up the odd one here or there,” he says. Taking advantage of the knowledge he has built up, he is offering an advice service to other would-be investors. His tips: parts of Poland, the Czech Republic and Romania.

Susan Challenger, 35, a change-management consultant from St Albans, Hertfordshire, is following in Tilney’s footsteps. Until earlier this year, her only link with eastern Europe was with Polish tenants in the house she owns in north Wales. This summer, after extensive research, she decided to buy two investment properties, one also in Katowice, for about £60,000 and another, in Gliwice, an even more obscure town in Silesia, for £90,000. Both properties were off-plan and will be completed next year. “I appreciate it’s a high-risk investment, but even if it goes wrong, it is not going to bankrupt me,” says Challenger.

Poland has had one of the best-performing economies – and property markets – of all the former communist countries in recent years, despite the often controversial policies pursued by its ruling twins – Jaroslaw Kaczynski, the prime minister, and his brother Lech, the president. The defeat of the brothers’ right-wing Law and Justice party in last Sunday’s election by the more free-market, pro-business Civic Platform party, looks set to give the economy a further boost. Donald Tusk, expected to the country’s new leader, has said his priorities are cutting bureaucracy, limiting the role of officials over state-controlled firms and introducing a new flat rate of income tax – which should make the country more attractive to property investors.

Simon Tweddle, chief analyst for Property Secrets, a Crewe-based company that specialises in sourcing new-build properties in the region, believes the market in Poland will continue to grow. However, the best prospects are not in Warsaw, the capital, where prices rose 33% last year, or Cracow, where they were up 45%, or Wroclaw, where they surged 55%. Rather, they are in obscure provincial places that have hitherto featured on the radar of only the most sophisticated investors.

“Warsaw could rise between 5% and 10% this year, but Cracow and Wroclaw are both looking overpriced,” says Tweddle. “Bydgoszcz, Szczecin, Bialystok, Lublin and Rzeszow are the kind of places that have the most potential for short-term growth.

“But there is always more risk, too. If you want to rent out somewhere in Warsaw, there will be a whole bunch of different management companies. I’m not sure how easy it would be to find someone in Rzeszow, for example, who is reliable and speaks English.”

But with tens of thousands of Poles seeking their fortunes in Britain and elsewhere, will there be anyone left to rent or ultimately buy all these properties from foreign investors when they sell? “The overall population may be going down, but there is a huge movement from the countryside to the towns,” says Tweddle. The property market is also being driven up by those same expatriate Poles investing some of their earnings back home.

Despite signs of a slowdown in property markets across the world, especially under the impact of the credit crunch caused by this summer’s crisis in the financial markets, the trend is upward in most of the region, according to 2008 forecasts by Property Secrets (see table). Prices in Slovakia and Slovenia, for example, should rise by 15%, and in Sofia and other Bulgarian cities by at least 10%, it predicts. Some of the strongest rises look likely in the Czech Republic, with prices in Prague up a predicted 25% and in Brno, the second city, by 30%. Romania looks strong too, with rises of 30% in Bucharest, the capital, and 20% in the port city of Constanta. “Prague is especially good,” Tweddle says. “That’s where I’d put my money.”

There are signs of trouble elsewhere, though, especially in the three Baltic states. Property Secrets predicts prices in Estonia and Lithuania will both rise by a modest 5% next year, while those in Latvia will not grow at all. This may be optimistic: other recent reports suggested prices in Estonia and Latvia have already fallen back by 8%-10% over the last few months.

Antony Tilney: antony@trpi.co.uk

Investing in the east

Predicted property price rises in Poland and elsewhere in Eastern Europe for 2008

Poland 10%

Warsaw 5%-10%

Cracow 5%

Lodz 10%-12%

Gdansk/Sopot/Gdynia 5%-10%

Katowice 20% Poznan 5%-10%

Wroclaw 5%

Eastern Europe

Czech Republic 25%

Romania 25%

Bulgaria 15%

Slovakia 15%

Slovenia 15%

Croatia 12%

Montenegro 12%

Russia 10%

Albania 8%

Estonia 5%

Lithuania 5%

Serbia 5%

Ukraine 5%

Hungary 3%

Latvia 0%

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