First Signs of Real Estate Market Cooling, Says Expert
1Partner Kinnisvara executive Marti Vahter said the current tempo of real estate price increases is not permanent, and there are already signs of the market cooling.
Real estate prices increased by more than 20 percent in Estonia last year, but Vahter told ETV on Wednesday that the increase was a one-off.
“Every new development project is no longer automatically more expensive than any previous project,” he said, adding that sales of new apartments have not matched expectations.
Vahter said prices could go up around 10 percent this year, falling to inflation levels after that.
During the last boom years of 2006 and 2007, 4,000 apartments were sold in Tallinn and in nearby areas annually, but that figure is around the 1,000 mark now.
Banks not feeding the frenzy
The Central Bank said the main difference is that currently, private banks are not pushing for sales at any costs.
The bank said prices dropped 50 percent during the recession and are now restoring, although they are still some distance from 2007 prices.