Economics, Estonia, Real Estate

Jaanus Laugus, the CEO of Uus Maa Kinnisvara, said that foreign investors are starting to take an interest in buying property in Estonia again.

"There are small investors who sell their apartment in Sweden and buy housing in central Tallinn, for instance," Laugus noted.

The expert added that the market has become notably more active in recent months. "What will happen next is a big question, but the trend is clearly going up," he said.

"The market is at or near its bottom. Prices are down 50% from where they were in April 2007 and it is a good time to buy," Laugus said optimistically.

There are plenty of more pessimistic real estate professionals as well. The analyst Tõnu Toompark said that every month someone claims to have seen light at the end of the tunnel. "Closer study shows that this has been wishful thinking," the expert pointed out.

"Apartment prices continue to fall because lack of buyers and lack of funding. We should not expect the real estate sector to grow before the whole economy starts to recover. If you look at the statistics in the first three months, then the number of apartment sales has gone up in 2009, but also in 2008 and 2007. So the pattern is the same – at the start of the year there was growth in transactions, followed by sharp fall in May. I expect favorable offers to continue since unemployment is increasing and property owners need to raise money to repay loans," Toompark noted.

There were 3,582 real estate transactions in Estonia in April 2009. For comparison, in April 2008 there were about 9,000 real estate transactions.