According to a recent report on the Statistics Estonia site, economic growth in Estonia grew by two per cent y-o-y to Q2 2012.
However, GDP only grew by 0.4 per cent, when seasonal and work-day factors are taken into account, between Q1 and Q2.
Most of the growth came from the construction, information and communication and administrative and support service areas, whereas manufacturing, the biggest single sector, had a negligble effect on growth, according to the report.
The report stated that reductions in value added in the real estate sector, going back to Q3 of 2010, had an impact on this slowing. Normalisation after the adoption of the Euro (which saw a rise in real estate prices due to ’rounding up’ around the time of the currency’s adoption in January 2011) and the rise in construction material prices may have been two causes of this.
This is not the final word on the matter from Statistics Estonia however; figures for Q1 and Q2 2012 growth will be re-estimated and published on the site on 7th September, the report stated.
The original report is available here.
Congratulations to Gerd Kanter of Estonia who, whilst not repeating his gold medal success in Beijing in 2008, was in the medals in the men’s Olympic discus in London last night, achieving a bronze medal with a throw of 68.03 metres on his penultimate throw.
Germany’s Robert Harting won gold with a throw of 68.27 metres, with Eshan Hadadi of Iran taking the silver medal.
Congratulations are also due to Heiki Nabi who attained Estonia’s first medal (silver) of the tournament on Monday in the men’s 120kg greco-romano wrestling event.
According to a recent article in the Estonian Press Digest from News2Biz, July 2012 saw something of a fall in real estate prices in Estonia as a whole, but at the same time real purchasing power (in Tallinn) for those wishing to purchase property also fell.
Citing real estate giant Pindi Kinnisvara‘s index as falling by 5.4 per cent between June and July, the report also stated that the real purchasing power of a Tallinn resident earning an average wage would stretch to a property of 68 square metres in area.
The Pindi Index is based on the weighted average transactions across the 17 largest Estonian towns (Tallinn is of course the largest with over 400 000 inhabitants, whereas 17th placed town is Kiviõli in Ida-Virumaa with only a little over six and a half thousand souls).
The average price of apartments per square metre in June 2012 for the whole of Estonia was 886 Euros, falling to 838 Euros per square metre in July, according to the report.
Not surprisingly the lower prices were accompanied by a somewhat higher rate of transactions – 991 in July, compared with 934 the previous month (this only covers the 17 cities incorporated in the Pindi index) the report stated.
According to the article, residents of Tartu and Pärnu can stretch to apartments a little larger in size when measured by their purchasing power levels (at 73 and 84 square metres respectively).
The Pindi Index reached an all time peak in April 2007 at the height of the boom, and an all time low in July 2009 (624.2 Euros per square metre).
As recently reported on this blog, the area surrounding the central rail station in Tallinn and the market there is to be extensively redeveloped.
In addition to this, new platforms are still being constructed; the initial deadline for completion was the end of July but it is now looking like being delayed for a few more weeks, according to a report by Robin Ilves on the Estonian Public Broadcasting site.
The disruption has led to the station operating at about half its normal capacity since April, with local electric routes run by Elekrtiraudtee the most affected, with replacement bus services often running instead, according to the report (most of the longer routes in Estonia employ diesel locomotives).
Private construction company Leonhard Weiss RTE is building the platforms, which range between 150 and 400 metres in length, two at a time and aims to have them done soon, with other work being carried out on suburban stations completing by September 2013, the report stated.
The original article is here.
Notwithstanding national air carrier Estonian Air’s muhc-publicised financial problems, according to a recent report on the Baltic Busines News site, the airline has carried 52 per cent more passengers as of the end of July 2012 than at the same stage during the preceding year.
At the same time, the number of passengers taking regular flights from Tallinn increased 78.6 per cent y-o-y, according to the report.
92 136 passengers flew from Tallinn on regular flights, 91 983 of whom were on regular flights, the report continued, with 515 721 passengers travelling with Estonian Air through the first seven months.
The occupancy rate of flights not surprisingly increased y-o-y to July 2012 too, by 9.2 per cent y-o-y to 98.9 per cent occupancy, the report stated, whilst
According to a report by Tõnu Toompark on his adaur blog, investment in real estate in Estonia has increased by 24 per cent y-o-y to the first quarter of 2012.
Citing figures from the Estonian Statistics office, investments from Estonian companies into plant and equipment fixed assets came to a value of 506 million Euros in the first quarter of 2012, writes Tõnu.
A bit less than a third of this total came in the real estate sector, including buildings and facilities acquisition, construction, repair work and the acquisition of land, Tõnu continues.
After a three year fall in investment in the real estate sector, the last five consecutive quarters have seen growth in investment, Tõnu writes.
The original article (in Estonian) together with diagrams illustrating investment levels in fixed assets including buildings, facilities, and land, and changes thereof, is here.
There has been a y-o-y increase in rental prices in Tallinn of 18 per cent, to July 2012, according to Tõnu Toompark on his adaur blog.
This undoubtedly is connected with the short supply of rental properties in Tallinn at the moment.
According to Tõnu and citing data from real estate portal kv.ee, the volume of rental apartments on the market has increased y-o-y, but not by much, which may put a downward pressure on residential rental prices through the summer and autumn – as noted there has been a rise up to now.
Tõnu cites more data from kv.ee which states that there were 1 996 apartments up for rent on the portal in June, which is only a two per cent increase y-o-y.
However, the shortage in availablility of rental items is not as perceptible today as was the case a year ago, Tõnu continues.
This will be predominant in those areas of Tallinn where more apartments have come on to the rental market, which has happened in all districts. writes Tõnu, except North Tallinn (which includes Kalamaja and Kopli) the Soviet-era residential district of Mustamäe and the leafy, sought-after outer suburb of Nõmme. These three areas have seen a fall in the volume of rental apartments available (by as much as -37 per cent in the case of Nõmme).
Fallinn demand may be the result of rising rental asking prices (as well as the latter being the result of falling supply). The average rental asking price in Tallinn was a 6.10 Euros per square metre in July 2011; a year later that figure had risen to 7.20 Euros per square metre.
In any event this makes the rental market attractive for investors; a shortage of supply and rising rental levels mean a property could be let out very quickly and at higher prices, ensuring good cashflow.
The district of Tallinn with the highest rise in number of rental apartments available y-o-y to July 2012 was the residential suburb of Kristiine, according to Tõnu’s data, at 23 per cent. The city centre (which includes the Old Town) saw a 10 per cent rise in number of available apartments over the same period, from 736 to 806 items (also by far the highest total number of items of any region, as might be expected).
Outside of Tallinn, Pärnu saw an 18 per cent rise in apartments available for rent, whereas Tartu saw the opposite trend with a -26 per cent fall over the same period.
The figure for the whole of Estonia was a -4 per cent fall.
The original article (in Estonian) and data is here.
As recently reported on this blog, one of the up and coming areas of Tallinn is the area surrounding the train station, merging into the Kalamaja and Pelgulinn neighbourhoods.
Our faith in this seems to be bearing fruit; according to a recent report by Ott Tammik on the Estonian Public Broadcasting (ERR) English language site, the City of Tallinn is drafting the very terms and conditions for the tender of architectural plans that will make this long yearned-for development become a reality.
The project has been in the offing for some 11 years, and will replace the existing Balti Jaama Turg (Train Station Market). Not surprisingly the developments are not unopposed – one point of contention is the reassigning of Reisijate Street, currently closed to traffic and taken up by much of the marketplace itself, as a traffic street, and the existing Kopli Steet to become a four lane thoroughfare, the report stated.
Currently traffic is undoubtedly congested, particularly at rush hour, since Kopli Street is a one way street along the stretch that passes the train station. New developments would require better road access.
Other dissenting or at least questioning voices, as well as market traders, include national rail carrier Eesti Raudtee who wish to preserve some rail sidings and have space for additional platforms in future, according to the report.
Previous architectural plans had met with objections due to apartment developments blocking the view of Toompea, the seat of the Estonian government and the highest point of the old town.
As noted on this blog the area where Telliskivi Street crosses train tracks adjacent to the station is already something of a bohemian quarter, with two or three successful restaurants and various other businesses.
The original report is available here.
More hopeful signs of economic recovery in Estonia comes with a recent report on the Statistics Estonia site which states that retail sales in Estonia increased by seven per cent y-o-y to June 2012.
Furthermore this trend has been continuing since March 2012; every month between March and June saw an increase in retail sales of between six and eight per cent, according to the report.
The total retail sales of goods of retail trade enterprises, to give the retail sector its full name, came to a value of 384.8 million Euros in June 2012, which represented about 80 per cent of the total revenues from sales of retail trade enterprises (484.9 million euros)* the report stated.
There was an apparent growth in all areas, but the sector with the biggest increase was pharmaceuticals and cosmetics (17 per cent) together with ‘non-specialized stores selling predominantly industrial goods’ (16 per cent) and ‘retail sales via mail order or the internet’ (15 per cent).
Retail sales in grocery stores grew six per cent y-o-y which was actually a lower figure than had been the case over the previous two months, but this was largely due to that sector starting from a higher reference base in June 2011 than some other sectors, the report stated.
The overall retail sales in retail trade enterprises month-on-month increase in June 2012 was three per cent at constant prices, and one per cent by seasonally and working-day adjusted data.
Over the six month period January-June 2012 the report said that retail sales in retail trade enterprises increased by nine per cent at constant prices compared y-o-y.
The original report is available here.
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*Revenues from sales increased by fourteen per cent at current prices y-o-y to June 2012, and by two per cent month-on-month, the report stated.