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Housing Loan Market Growth Is Supported By Property Values And New Borrowers

The number of transactions at the Tallinn apartment market is high and on an upward trend; also, the transaction prices are rising. The vast number of transactions and other positive trends of property market are to a large extent backed by the loan market. The turnover of housing loans is thriving upon low interest rate and this gives more and more people an opportunity to buy a home with a housing loan.

The number of apartment transactions is showing a strong increase

The number of apartment transactions in Tallinn is robustly growing. In Q1 2017, 2,449 apartment ownership deals were signed in Tallinn. This corresponds to an annual growth of 19%. The number of transactions has gone up in terms of home buyers as well as rental investors. Demand has been supported by rising wages, high employment rate, but also favourable loan conditions and low interest rate.
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Statistics: Financing For Residential Real Estate In Estonia Has Dried Up Somewhat

The balance of loans across the various sectors of the real estate market has remained notably stable in recent years, according to Tõnu Toompark on his adaur blog.

The only significant increase in the loan balance has been in the retail sector, Tõnu goes on.

There has however been a decrease in resources for the funding of residential space, Tõnu says.

This decline in the residential loan balance results from a decline in loan sales, which in 2011 came to a total of 45 million Euros.

This is less than several residential development projects’ finance quarterly turnover levels during the boom years, Tõnu says.

The full article (in Estonian) with diagrams illustrating loan balance and turnover, for residential, office, retail, industrial and other sectors, including loans to non-financially regulated companies, is available here.

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