Real estate credit unworthiness biggest obstacle of moving to the country
While migration from rural areas to cities has been increasing year by year, the government would like to see this trend reversed. Moving to rural areas requires both the availability of necessary services and the ability to purchase a house with a loan. Unfortunately, most real estate outside of larger cities is not considered eligible for loans by banks.
On Saturday, in Uhtna, Lääne-Viru County, the government gave thanks to families who have decided to move from large cities to rural areas. A total of 24 families from 19 municipalities received the gift of special bread. While there were likely more people who moved to the countryside over the past year, this gesture still highlights the strong opposite trend – most rural areas are emptying as people move to cities.
"The trend is that more people are leaving, and the number of people in cities is increasing. This is our biggest challenge. First, the population in rural areas is declining, and second, if we look at the unemployment rate and income levels, there are also significant gaps," said Regional and Agriculture Minister Piret Hartman (SDE).
Rakvere Municipality is one of the few areas where people still want to move.
"Our municipality is fortunately growing. We are a ring municipality around the county center. This means that the heart of the county is here, and developments are expanding outward from the city. We have a school, kindergarten, youth center, library and even a building for extracurricular activities. When people choose a place, they pick somewhere with services close by, where their children can safely attend kindergarten and school," said Rakvere Municipality Mayor Maido Nõlvak.
At the initiative of the municipality, seven single-family homes were recently built in Uhtna, which new residents have just moved into. For years, the municipality tried to sell land plots with building rights directly to individuals, but banks would not provide loans for such purchases. It wasn't until a developer was involved that things changed.
"For young families, it's relatively impossible to get a loan from the bank to move to the countryside. But after we made the decision in the council to allow legal persons access, meaning that a developer could step in, we quickly found a developer. The developer built the houses in two years, and within a couple of months, young families had already moved in," Nõlvak explained.
The municipality plans to repeat this successful model, though such an approach is rare in rural areas.
Vallo Kõrgmaa, a lifelong resident of Tallinn, wanted to raise his children in the countryside. Uhtna was chosen by chance.
"Basically, we looked all over Estonia. We had criteria for our search. The main requirements were that a school and kindergarten be nearby, and having a store was a bonus. The property needed to be reasonably priced and have as large a garden as possible," he said.
How easy is it to get a bank loan to buy a home in the countryside?
"We were able to get a full package; it was attractive enough for the bank. But if you're buying a plot of land and planning to build on it, it gets a bit more complicated," Kõrgmaa noted.
Kersti has lived in Uhtna for 24 years and has no regrets about moving there.
"My children both grew up here, went to school, attended kindergarten. We couldn't ask for anything better. (Is there work available here?) There is some. Nursing homes, schools and wood industries. If you're looking, you'll find something," she said.
According to Minister Hartman, the state is working hard to ensure that local governments have the capacity to provide schools, kindergartens, libraries and other public services as required by law, services that are increasingly disappearing.
"We have also made changes to how local governments are funded. The goal is to ensure that these opportunities are available not only in larger cities and municipalities but also in smaller areas. So my aim is certainly not to set up a state-run bus service but to empower local governments," Hartman said.
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Editor: Marko Tooming, Marcus Turovski