In recent months Estonia’s leading real estate online portals have closed hundreds of accounts of real estate agents because of debts.
Real estate developer turns attention to state real estate auctions
Tarvo Teslon, CEO of Diginet that runs the popular kv.ee website, told Eesti Päevaleht that the company has closed about 40 accounts in the last two months. “The business of real estate agents has dried up and they cannot pay monthly subscriptions so we have no other option,” said Teslon who adds that this is about 10 percent of all accounts used by real estate agents to advertise their property in kv.ee.
Teslon said that typically real estate companies owe between a few thousand to EEK 40,000. “We will close the account when the debt amounts to EEK 15,000,” he said.
According to Teslon, in most cases the accounts belonged to one-man companies, but the list of debtors includes some large real estate companies with offices in several Estonian towns.
Teslon said that the situation became notably tougher at the beginning of the year and continues to deteriorate.
Karin Noppel, marketing manager of City24, agrees. “The work of real estate brokers is very tough right now and this can be seen in our financial results,” she said, but refused to say how much the company owes. “We hope that this is not a long-term problem.”
Real estate analyst Tõnu Toompark said that the main problem in Tallinn is not the price of square metre, but a sharp decline in the number of transactions. “My estimations show that prices in central Tallinn have been increasing, not falling,” said Toompark, adding that prices outside the centre have been falling.
Artikli autor on Toomas Hõbemägi. Artikkel ilmus 04/08/2008 väljaandes balticbusinessnews.com.