Tallinn Real Estate Market Report December 2010

To wrap-up 2010 and look ahead to 2011, please don’t hesitate to check our latest Tallinn Property and Rental Market Quarterly Review.

As always our review contains an in-depth look at the Tallinn residential market, the situation regarding mortgage loans, information on average asking and transactional prices, the current state of the central Tallinn rental market, and also offers invaluable sample transactions and advice on rental business considerations.

You can find the full report at: http://www.goodsonandred.com/sharedfolder/tallinn-property-market/marketreview-tallinn-real-estate-q4-2010_web151210.pdf

We would very much like to hear your views regarding the Tallinn or Estonian property market. Furthermore, if you have any suggestions regarding topics, please do not hesitate to leave your comment or tweet us, or write on our wall.

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Slight Fall In Tallinn Property Transactions For October

Tallinn property transactions fell in October in comparison with the previous month, according to Tõnu Toompark’s blog Adaur.ee (available in Estonian only).

Citing figures compiled by Tallinn real estate agents 1Partner Kinnisvara, transactions fell by 12 per cent, from a figure of 482 million Kroons (c. 30.8 million Euros)  in September to 423 million Kroons (c. 27 million Euros) in October. 1Partner’s executive director Martin Vahteri said that activity was particularly noteworthy in the Vanalinn (Old Town) and City Centre areas, where the highest real estate prices are generally to be found. He further remarked that a significant proportion of transactions involved overseas nationals, most notably Finns and Russians. 17 per cent of transactions, a total of 112 objects, comprised foreign investors, he said.

Average price per square metre stood at 15,546 Kroons (c. 994 Euros). The value of transactions of apartments varied hugely, from a reported highest price of 6.225 million Kroons (a little less than 400,000  Euros) to a low of 10,000 Kroons (c. 640 Euros)!  The most expensive transaction on a whole housing unit stood at 11.5 million Kroons ( c. 735,000 Euros). There were foreclosures on 31 buildings in October.

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Hopeful Signs For Estonia’s Economy

More encouraging signs for the future of Estonia’s economy can be gleaned from a report from Edward Lucas’ blog on the Economist website. The article focuses on the rapid growth in industrial production, citing lastest figures of 31.1 % year on year growth in industrial production as being particularly noteworthy.

This is of course an important indicator; however Estonia’s recovery to date has largely been export-driven. A report by Maris Lauri and Annika Paabut from Swedbank, which the Economist blog also links to, sets out forecasts for the economy in a broader context. Their predictions are, it has to be said, encouraging, and include a GDP growth rate of as much as 4.5 per cent for 2011 and 2012, a gradual fall in unemployment to 12.5 per cent in 2012 (currently just under 18 per cent) growth in investments, growth in household consumption in single percentage points (this actually fell by 18.4 per cent in 2009 according to Swedbank’s figures!) and a possible governmental balanced budget by 2014. Inflation is forecast to hover around the 3-3.5 per cent mark over the next couple of years, probably as much as 4 per cent over the coming winter, the report says.

Naturally as adoption of the Euro draws closer the implications of this are on the minds of many. It seems likely that the new currency will bring with it some benefits; part of the criteria for joining are the reduced bank reserves required by the Euro Zone, from 15 per cent to two per cent (this process is to be carried out in stages and has in fact already begun). This additional liquidity however is mostly likely to be absorbed by the banks redeeming loans or building up some reserves of their own.

But perhaps most perspicacious is Mr Lucas’ observation that of all the member states of both the EU and NATO, there is only one which as of January 2011 seemingly actually adheres to all the rules of both organisations – Estonia!

The full report from Maris Lauri and Annika Paabut is here. See also Swedbank’s publications page here.

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Tallinn Property Market Report Q3 2010

Just finished polishing our fresh report of housing and rental market in Tallinn.

Using partially the words from the preface of our review – participants in the economy have largely been communicating positive messages and making promising forecasts through the whole summer period. This obviously applies also to property markets. It seems likely that the market decline has indeed bottomed out. However, there are no reasons yet to feel too inspired, as there are still a host of macroeconomic factors which are deeply troubling. There is an overall degree of uncertainty in the market. Firstly, IMHO, it’s not wise to recover from a hang-over by taking another drink.

Real estate can be taken as a bunker instrument though :)

So, we believe that mortgage market might become slightly more active and interest rates stay at their current level; however, consumer security is subtle and we’ll probably see a decrease in the indicators. Therefore no increase in number of property transactions or prices, but uncertainty and risks may support the activity of the rental sector. The rental market has been quite active during in previous years as property purchases and sales were restricted due to a lack of financing. This may be one of the factors which will help to increase the rental sector in Estonia.

You can find the full report at http://www.goodsonandred.com/sharedfolder/tallinn-property-market/marketreview_tallinn-property-q3-2010_web240910.pdf

What do you think? Would very much like to read your thoughts and experiences. Or if you have any questions you’d like us to address, email, tweet us or leave us a comment below or on our Tallinn Property Page.

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