Entrepreneurs doubt the ministry can attract developers to Ida-Viru County with bonuses of just a few hundred thousand euros. Moreover, some see that instead of opting for simpler solutions, the state might actually be creating a market distortion.
“The state clearly doesn’t know what else to do with its money, so it might as well spend it,” criticized real estate analyst Tõnu Toompark. “I find it hard to believe the state has the capacity to turn the market in a new direction like this.”
Confidence was also lacking in the words of Janar Muttik, CEO of Everaus Kinnisvara. “We have considered looking toward that area (Ida-Viru County – ed.), and we’ve done the calculations, but even if the land were given to us for free, the numbers still didn’t add up in Excel,” Muttik said.
Nevertheless, the Ministry of Regional Affairs and Agriculture hopes to revive the real estate market in Ida-Viru with a pilot project that includes subsidies to mitigate the risks for apartment developers. “To ensure people remain and move to areas beyond the growth regions of Tallinn and Tartu, we must provide modern housing,” the ministry stressed in a press release.
The Forgotten Market of Real Estate
No one denies the problem. Toompark agreed that the housing market in Ida-Viru has long been neglected. On the one hand, property prices have grown the slowest in the region. While that could be seen as a positive—housing remains affordable for residents—low prices also discourage new apartment development, he noted.
This same issue was pointed out by Minister of Regional Affairs and Agriculture, Piret Hartman. “Another challenge is that developers have difficulty obtaining bank loans for real estate projects. That’s why we’ve agreed with the Ida-Viru County Association of Municipalities that the state will step in with support measures to help fund the first new apartment buildings in the region,” she added.
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