Bank Loans Playing Increasingly Minor Role in Real Estate Market
According to real estate companies, one of the major differences between the current market and that of pre-recession times is that fewer purchases, under half, are financed by bank loans.
"People seem to have money on their accounts. As interest yields from savings are nonexistent and we have seen a rise in real estate prices and daily inflation, people have now started to think that it might be more sensible to invest in real estate," Martin Vahter, who heads the 1Partner estate agents, told ETV on Tuesday.
Andres Tukk, Swedbank's personal finance division director, said that real estate price increases have outpaced salary growth.
Tukk said that though there are no problems with rapid price growth in most of the country, the general price increase in certain areas, mostly in Tallinn's city center and the Põhja-Tallinn district northwest of Old Town, has sparked concerns of potential market overheating.