Real Estate Investment Market Perspectives in Estonia: A Survey Analysis

Since 2008 the world has witnessed a remarcable recession in global financial and capital markets, being the concequence of the subprime crisis emerging in August 2006. As Estonia is exposed to global market trends through the open economy, the problems at first started with the real estate market downturn since 2007, caused largely by the growth in interest rates and the tightened lending policy of commercial banks. Being quite a small country, the problems emerged quite quickly and severely and by now has moved on to other economic sectors. The current paper summarizes the Estonian real estate market development trends so far, discusses about the reasons of market downturn and gives as objective assessment as possible for the nearest future trends. The main attention is given to the potential of the real estate investments in the region, bringing out the various opinions of practitioners in the market. The aim of the paper is to discuss the main issues concerning real estate investment market perspec-tives in Estonia within the current economic situation. The following research tasks have been set up to achieve the aim: 1) to give a brief overview of macroeconomic state in Estonia; 2) to analyze the current state of real estate sectors in Estonia: rents, yields, impact of capital market, other relevant data; 3) to present the findings of in-depth questionnaire conducted among various real estate practi-tioners in the region; 4) to draw conclusions and make suggestions.