Estonian real estate sector in standstill

The Estonian real estate sector is stagnating and property prices continue to fall, writes Äripäev.

According to Äripäev’s real estate analysts, most predictions made by the paper in January have become a reality as the market has gone to a standstill and the first recovery could take place only in the fourth quarter.

The paper says that while property prices continue to fall almost in all segments, it is now clear that Estonia has avoided a real estate crash. The number of property transactions is falling, sales periods are getting longer and the market is sleepy.

One notable change is that more small developers are facing bankruptcy since there are no buyers for new housing developments. On an upside, prices have been coming down slowly, not sharply and it is clear that housing developments in poor locations cannot be sold at any price. The situation is different for quality housing space which still has buyers. The whole market resembles 2004 when the boom was far away.

Real estate analyst Tõnu Toompark has said that there are 4,500 apartments waiting for buyers in Tallinn and the surrounding area.

As for office developments, pressure is growing since there are very many new office complexes in construction in Tallinn and some new office buildings in suburbs find it hard to find tenants since companies have been postponing relocation, hoping for better times and cheaper rent.

Artikli autor on Toomas Hõbemägi. Artikkel ilmus 05/05/2008 väljaandes

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