Analytics, Estonia, Real Estate

Tarvo Teslon, CEO of Diginet, that runs the popular real estate trading portal Kv.ee, told Eesti Päevaleht that the company has closed about 40 accounts in the last two months.

“The business of real estate agents has dried up and they cannot pay monthly subscriptions, so we have no other option [rather than to close their accounts,“ said Teslon, adding that 40 accounts is about 10% of all accounts used by real estate agents to advertise their property.

Teslon said that real estate companies on average owe between a few thousand to EEK 40,000.

“We are going to close an account when the debt amounts to EEK 15,000,” he said.

According to Teslon, in most cases the accounts closed belonged to one-man companies. The list of Kv.ee debtors includes some large real estate companies with offices in several Estonian towns.

Teslon said that the situation became notably tougher at the beginning of the year and continues to deteriorate.

Karin Noppel, marketing manager of City24, agrees: “The work of real estate brokers is very complicated at this time, and this reflects in our financial results."

Noppel refused to say how much the company owes, noting: “We hope that this is not a long-term problem.”

Real estate analyst Tõnu Toompark said that the main problem in Tallinn is not the price per square meter, but a sharp decline in the number of transactions. “My estimations show that prices in central Tallinn have been increasing, not falling,” said Toompark, adding that prices outside the centre have been falling.

As reported, the volume of real estate transactions fell 38% year-on-year in the second quarter, Aripaev.ee writes.

According to Estonian Land Board, there were real estate transactions worth EEK 11.746 billion in the second quarter. A year ago, that sum amounted EEK 18.926 billion.

Altogether 14,061 real estate transactions were made in the second quarter of 2008. Last year in the second quarter, the real estate transactions totaled 17,061.

As usual, one-third of the transactions were made in Harju County (5,752).