Analytics, Banks, Estonia, Real Estate

Viik said that although the real estate market of Tallinn is very active, the demand and supply of apartments is still in good balance. "The volume of the supply of new apartments is at present equal to one year's sales which is very sustainable," he said.

When asked whether shocks originating from the external environment and the instability of global economy will influence Estonia's residential real estate market, Viik said that at present such a danger is nowhere in sight. "Estonia's small size and dynamic economy adapt well to changes on external markets," she added.

Head of Swedbank's private banking department, Kaie Metsla, pointed out that the uncertain global investment climate rather favors Estonian people using their savings to buy real estate. It also helps to increase the share of people's own investment.

At present borrowers' own investments make up 44% of home loans given out at present, while during the economic boom the indicator was 10%. "Therefore customers are better protected," Metsla said.

In 2016 the home loan volumes have stabilized and the total volume of loans issued in 2016 only makes up 42% of the total volume of loans issued in 2007.

"In addition, the share of customers who have difficulties paying back their loans is marginal. It is supported by high employment, low interest rates and an active real estate market. We expect the market to remain active and at the same time stable, unless something big happens in global economy," Metsla said.