Both enquiry numbers and loan volumes are climbing among our neighbours, while Estonia is moving at a calmer pace, with a stronger focus on the long-term outlook. This neatly reflects the differing market sentiments across the region.
According to Daniil Aal, recently announced as Estateguru’s next CEO, developers in Estonia are acting with great rationality and caution, as there is still a sizeable stock of unsold projects.
“In Estonia, people are looking far ahead and closely monitoring consumer behaviour. In contrast, Lithuania has seen growth for the past four quarters, and Latvia is also trending upwards,” Aal explains.
Tarmo Kase, Board Member of Ober-Haus, confirms that while there’s no major growth in the Estonian market, it would be misleading to talk about a crisis:
“In Tallinn, we still see around 19 transactions per 1,000 inhabitants annually, almost identical to Riga and Vilnius. The average number of monthly transactions remains stable at about 700. However, while Vilnius has grown by 50% and Riga by 30%, Tallinn’s growth is under 20%. Consumer confidence is low in Estonia, inflation is high, and the government’s tax policy has dampened purchasing power. The focus is on needs-based purchases, with a preference for well-renovated flats over 10 years old,” Kase comments.
Property-backed loans attractive for investors
Aal also points to some clearly positive notes. For example, activity is picking up among investors who provide capital to property developers.
“Comparing the last two quarters of last year with the first two of this year, both deposit volumes and the number of active investors on the platform have grown,” says Aal.
He adds that falling interest rates on fixed-term bank deposits, along with recent stock market volatility, have encouraged people to consider alternatives and investing via Estateguru has benefited from this trend.
In the first half of this year, more than €33 million worth of property-backed loans were issued via the Estateguru platform. 95% of these loans are performing well, meaning borrowers are meeting their obligations as agreed. Compared with the past two years, the figures are in the same range, suggesting no change in repayment behaviour — good news for investors.
