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Housing Market Development in Estonia: Is There a Real Estate Boom?

Author

Listed:
  • Ene Kolbre

    (School of Economics and Business Administration, Tallinn University of Technology)

  • Angelika Kallakmaa-Kapsta

    (School of Economics and Business Administration, Tallinn University of Technology)

Abstract

The Estonian economy including the real estate market, especially the housing market, has undergone a rapid development since its very existence in the 1990s. The number of notarised purchase-sale contracts of real estate has increased over 80 times over the past 10 years. The fastest growth rates in the real estate market have been in the housing sector. The total value of notarised purchase-sale contracts of registered immovables with residential buildings and ownership of dwellings has increased from 271 million euros in 2001 to 1982 million euros in 2005, whereas the average purchase-sale price per square metre of a 2-room apartment in Tallinn rose in 2004 22% and in 2005 59%. In resent years there have been repeated hints in the housing market of an approaching real estate crash. The development of the housing market has been investigated from three main aspects. First, the development of and changes in Estonian economic environment are evaluated and links to the general development of the whole real estate market and especially of housing market are provided. Secondly, in greater detail the demand and factors influencing demand in the housing market are analysed. Thirdly, the supply of the housing market, the factors that facilitate and inhibit this development are investigated. The housing market development in Estonia, differences from and similarities with Latvia and Lithuania are also presented in this paper.

Suggested Citation

  • Ene Kolbre & Angelika Kallakmaa-Kapsta, 2006. "Housing Market Development in Estonia: Is There a Real Estate Boom?," Working Papers 146, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    • Handle: RePEc:ttu:wpaper:146
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    File URL: http://deepthought.ttu.ee/majandus/tekstid/TUTWPE_06_146.pdf
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    References listed on IDEAS

    as
    1. Muellbauer, John & Murphy, Anthony, 1997. "Booms and Busts in the UK Housing Market," Economic Journal, Royal Economic Society, vol. 107(445), pages 1701-1727, November.
    2. Jürgen von Hagen & Iulia Traistaru-Siedschlag, 2006. "Macroeconomic Adjustment in the New EU Member States," SUERF Studies, SUERF - The European Money and Finance Forum, number 2006/4, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ene Kolbre & Angelika Kallakmaa-Kapsta & Taavi Ojala, 2009. "Estonian Housing Market: Searching for Origins of the Boom," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 1(2).
    2. Liis Ojam‰e, 2007. "Appraising and Brokering in Estonian Housing Market: Different Forms and Norms of Professionalisation," Working Papers 157, Tallinn School of Economics and Business Administration, Tallinn University of Technology.

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    More about this item

    Keywords

    Estonian; Latvian; Lithuanian housing market; demand; supply;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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