According to Statistics Estonia, in the 3rd quarter of 2013 436 dwellings with total floor area of 48 400 m2 were completed, i.e. were granted the permit of use.
Compared to the same time of previous year, the number of dwellings that were granted the permit of use increased 13 and their floor area 12%.
Still, the growth numbers of the 3rd quarter are not a reason to celebrate. During the three quarters of the current year still 9% less dwellings were completed than in the three first quarters of the previous year.
The average floor area of the completed dwellings was 111 m2. This means that a large part of the completed dwellings are still one-family dwellings, terraced houses and semi-detached houses, and smaller part are apartment houses.
With its narrow streets, medieval buildings and quaint Christmas markets, the city of Tallinn resembles a scene from a Christmas card.
Read more about Tallinn and 7 other of the world’s cutest, coziest, wintriest scenes, and how to find them yourself on CNN by Tamara Hinson
According to Statistics Estonia the consumer price index of October is 1,5% higher than that one year ago. At the same time housing expenses have increased as much as 8% in one year.
By today, in comparison with the year 1997, the consumer expenses have almost doubled and the housing expenses have increased 3,2 times. This means that the increase in housing expenses exceeds the overall increase in consumer prices during that time 66%.
According to Statistics Estonia, as of September the construction price index which influences the real estate market mainly from the supply side, is 4,9% higher than that one year ago.
The increase in construction price index is mainly due to labour expenses becoming more expensive. Unfortunately this does not mean increase in salaries in that sector but the positive process of black-market labour legalization.
With opulent church spires, a castle, and winding streets still using names from the Middle Ages, Tallinn is more than the capital of Estonia. Anne Banas from SmarterTravel.com writes on USA Today about 10 irresistibly charming World Heritage cities.
You can find the article here: 10 irresistibly charming World Heritage cities
According to Statistics Estonia, in the 3rd quarter of 2013 11 093 transactions in real estate were made with total value of 561 million euros. Within a year the number of transactions in real estate increased 15 and the value of transactions 17%.
Of the 11 093 transactions 56 were transactions with the rights to superficies. The total value of transactions with rights to superficies was 5 million euros.
Today’s number of transactions in real estate exceeds the minimum point of transactions in 2009 by a little over two times. Yet the value of transactions exceeds it 87%.
However, we are still 24% below the peak of transactions and turnover in 2007. Today’s turnover of transactions in real estate is almost 2,5 times lower than the peak in 2006.
The average residential mortgage loan in Estonia fell to €36,802 in Q3 2013. However, the changes are not significant – the loan balance a year ago was just 1% bigger than today.
The average loan amount is decreasing mainly as a result of new residential mortgage loans. The total number of residential mortgage loans just a year ago was 157,600, but the relevant indicator at the end of Q3 2013 was 159,400. This shows an increase of 1.2%.
The main factor behind the increase in the number of residential mortgage loans is the interest rate, which has remained very low for a year now. The increase in average wages has supported the good impact of the low interest rate.
The fear of missing out on the price increase shared by home owners is also something that must be mentioned. The hope that the fast increase in apartment prices seen last year will also continue in the coming years is an increasingly more frequent reason for buying a home.
According to the Bank of Estonia, the balance of loans granted for investment properties and development in Q3 2013 was €1.7 billion. This is 4.6% less than in the previous year.
The loan balance of retail property financing has decreased by 21% and the loan balance of residential development by 17%.
The decrease in the residential development loan balance is the result of the low new loan turnover. In Q3 2013 banks issued loans in the amount of €7.5 million for residential development, which is one of the lowest figures in recent years.
It’s no surprise that both foreign investors and local business people looking into purchasing a residential property or an office space first plump for the prestigious and historic Vanalinn, or Old Town, for a taste of late-Medieval charm. The old town’s castle-like masonry architecture, with its partly-exposed stone walls, pale coloured stucco, deep window sills, exposed raw timber beams and heavy wooden doors replete with hammered iron hardware are all features that will take you right back to the fourteenth and fifteenth centuries.
As the secondary choice for many, and in fact the primary choice for more than a few IT and telecoms companies, small business owners and sometimes students, the area immediately outside the old town (called the Kesklinn, or town centre) is also attractive in terms of available residential and office buildings. Such buildings vary greatly in quality, style and facilities – starting with the inter-war period masonry buildings which are almost as robust as their Old Town counterparts and which can be anything from fascinatingly detailed to utterly minimalist, through to the sombre early Soviet era concrete pseudo-classic style blocks. The range continues all the way up to the glass and metal post-independence boom-period “new” buildings which nonetheless seem to age quite quickly, with their glory fading away much faster than the older adjacent buildings.
Recently the eyes of investors as well as the “new locals” have shifted their focus to the district of Kalamaja – an area which is also situated immediately next to the Old Town, where both masonry Art Deco and traditionally detailed weatherboard-clad multifamily houses stand side by side in harmony. The area is characterised by its calm, airy feel, where residents enjoy the ever-changing colours of light shining through the mature leafy trees in summer as much as the warm, amber light from the living rooms and kitchens escaping onto the thick layer of snow in winter.
Some landowners who have clearly been misguided by the false sense of “per square meter” economy have constructed an array of concrete panel “imitation” apartments in Kalamaja, replacing the empty lots and dilapidated or even burnt down old buildings. However, some wise land owners have constructed new buildings using mostly traditional methods and the original blueprints combined with more functional thermal insulation and heating technologies, offering more comfort yet an aesthetic typical to the area and matching the surroundings. Such phenomena as unoccupied quality apartments are becoming scarcer, unless they are ridiculously overpriced, and more and more young families are relocating to Kalamaja.
This also meant that the residents of older generations are slowly being pushed out of the area due to increasing rent and maintenance costs of old buildings, meaning that the area is very young and becoming more “cultural”. A local former industrial complex now hosts a restaurant, bars, cafes, weekly flea-markets and other attractions to meet the young families’ needs for a meeting place as well as economical ways to get much-needed children’s supplies as well as kitsch vintage decor items.
There is another adjacent area, Pelgulinn, not yet deeply explored by either foreign buyers or local developers. Pelgulinn offers a much greater variety of building age, styles, sizes, finishes and prices than does Kalamaja. If Kalamaja is geographically separated from the Old Town by the railway station and the tracks, Pelgulinn is further separated from Kalamaja by more railway tracks and a marked lack of commercial activities. It lies sandwiched between the industrial railway depot and the main thoroughfare in North Tallinn, Sõle Street, with many more compact lower-income housings at the Northern end of the district close to or actually on Sõle, while more beautiful yet not overly elaborate buildings can be found at the Southern end towards Telliskivi street. There are numerous cul-de-sacs and shortcuts for pedestrians compared with Kalamaja, making an almost ideal neighbourhood structure according to urban planning textbooks on what constitutes a liveable neighbourhood. Even though most buildings share the same periodic influence as of those in Kalamaja, Pelgulinn has a markedly different atmosphere. Pelgulinn is an area where a good mix of buildings in various states await an injection of financial investments and new generation of residents to raise the quality of the streets.
Pelgulinn does not share the feel of a seaside town which Kalamaja hints at. For some strange reason the Old Town appears far more elevated when viewed from Heina Street in Pelgulinn, where it looks almost like a Medieval castle town situated in more mountainous country such as that surrounding Salzburg or Prague. This makes you wonder whether a great river divides the Old Town and your standing point – in no such river runs through Tallinn. Pelgulinn is an area which offers a very different feel from other parts of Tallinn. The district features former workers’ wooden terraces, railway tracks, idiosyncratic house number discs and street names in both Estonian and Russian, and garages and disused factories the area lacks of cold industrial feel. The streets are slightly narrower than those of Kalamaja and the lack of pastel-colour houses found in the latter gives a more authentic look of a residential suburb which the Western European countries lost back in the seventies. There is something of a nostalgic feel to the area yet it is not left undeveloped either. Brand new apartments cleverly blend into the surroundings, and although some old buildings look well-worn from outside their interiors can be very contemporary.
Pelgulinn is best explored on foot, even without a map. There are so many things to be discovered every day throughout the year. It may even offer the perfect excuse to walk or ride a bike in order to go shopping for groceries at Jaama Turg – the Railway Station Market – rather than driving to a hypermarket.
text by: Satoshi Joshua Ogawa
The author is a Tallinn-based architect recently moved from Brussels and specialising in residential building designs.
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.