Volumes on the mortgage market continued an upward trend in October, with lower unemployment and higher incomes increasing household borrowing and consumption, according to a statement from the Bank of Estonia.
October saw the largest number of new housing loans signed in a single month since 2008 - 2,000. Since the same month last year, activity increased 28 percent.
Still, due to the balancing effect of repayments, the total amount of housing loans over the year has grown by a more modest 0.5 percent.
The central bank warned markets to steer clear of speculation of rapid growth in real estate prices, supporting the current conservative approach.
The average interest rate on new housing loans has recently been around 2.5 percent.
Meanwhile, the turnover in other household loans also picked up in October, but the number of loans remained 5 percent shy of the same time last year.