Residential Market Commentary 2009 Q3 - Estonia
Apartments in
Compared to the top in spring 2007, prices in
Moderate price decline continued in 3rd quarter, although the amount of apartments for sale decreased and number and volume of transactions increased. According to statistics the average sales time extended and the offer prices continue to decline. Many potential sellers have withdrawn their objects from listings, because they see no possibility to get the price they wanted.
In 3rd quarter the market was affected by several large block transactions, which were made with prices lower than average.
Increasing amount of bankruptcies, both firms and individuals, have risen the number of forced foreclosures.
In city centre more apartment offers originate from boom time buildings compared to old apartments, than in suburbs.
Most probably 2 - 3 new developments will be started by some bigger developer, because the construction price has fallen significantly and in several regions the demand starts to exceed offering at some price levels. The developers will probably have to finance the projects from their own funds, because banks are afraid to finance new projects at the moment.
In August the growth of residential loans was negative for the first time in 8 years. On EUR bases the interest for residential loan starts at 3%, on EEK bases at 7%.
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