Construction, Estonia, Real Estate

“The bad news today is that it isn’t possible to buy new apartments from Merko anymore,” said Merko Ehitus council chairman Tõnu Toomik at a press conference. "The good news is that we intend to build 109 new apartments in Tallinn."

Toomik said that the statistics of recent months shows that the fall of real estate prices at the market has halted and the number of transactions has turned towards an increase. "Since construction prices are low, it is a very favourable time for building,” he said. “On the other hand, banks have become mellower in issuing housing loans and reduced the self-financing rate, interest rates are also at a favourable level.”

Toomik said that although banks still don’t want to grant loans to real estate developers, Merko has enough liquidity to finance these projects on its own.

Merko housing construction division head Tiit Kuusik said that real estate market fall has bottomed out and next summer would be a good time to arrive at the market with new projects. He said that the market is rather empty as clients want primarily high-quality new development projects.

Kuusik said that he has heard that other construction firms are planning to build new apartments but most likely not in the volume Merko is. “There will not be a boom like there was a couple of years ago but we expect the normal business environment to start returning,” he said.

Merko Ehitus will build a 60-apartment house at Pärnu mnt 129 and two houses, 15- and 34 apartment buildings at Räägu street in the Kristiine district, all of which are not far from the city centre. Merko is also looking for cooperation partners to develop other new projects.