More Signs of Real Estate Prices Calming as New Mortgages Numbers Decline
The 20 percent real estate price increase seen last year is showing more signs of cooling as the number of new mortgages taken out dropped by 3 percent in May compared to a year ago.
According to statistics from the Bank of Estonia, the total home-loan portfolio did increase, by 1.6 percent compared to May 2013.
“Due to low base rates, loan interest rates have been favorable to borrowers for close to two years,” Jana Kask of the bank said.
1Partner Kinnisvara executive Marti Vahter said at the beginning of May that prices should increase around 10 percent in 2014, and every new development project is no longer automatically more expensive than any previous building, as has been the case in the previous few years.
Compared to the boom period of 2006 and 2007, the number of apartments sold in Tallinn, the nation's real estate hotspot, each year is three times lower at around the 1,000 mark. The Central Bank said another difference is that private banks are not pushing for sales at any costs.