CEO of Everaus Kinnisvara Janar Muttik answered the questions of Kinnisvarauudised.ee regarding the housing market. According to Muttik, the real estate market has been moving sideways in recent quarters. The market is currently dominated by large developers who are well-capitalised. Price drops are more likely to occur in the secondary market where there is more room for price reductions in the case of increased selling pressure.
‘The economic downturn has been going on for two years and the real estate market has been moving sideways for the last few quarters,’ Muttik points out. ‘Although Estonia’s GDP has fallen by 6%, the labour market indicators are good and there is no sign of any change in this respect. The only variable I could bring out is that the Ukrainians who have arrived here have been added to the list of the unemployed, which has artificially inflated the unemployment numbers. In reality, our labour market has held up very well. This is partly due to a shrinking labour pool and increased competition among companies to attract qualified employees, which in turn prevents wages from declining.’
According to Muttik, Estonians’ savings rate has remained largely unchanged, but purchasing power has fallen due to rising prices. ‘This is giving a negative boost to consumption, which has also reached the real economy. But Estonians are conscientious, and it’s unusual for someone to be in debt to the bank. Instead, they will reduce their everyday expenses. As a result, the number of people defaulting on their loans is marginal, and historically, the situation has not been so favourable in similar economic conditions,’ considers Muttik.
Read more on the Kinnisvarauudised.ee website (in Estonian).
