1.2 million internet purchases are made each month

Eesti Pank’s statistics show that in the past 11 months*, 1.2 million internet purchases have been made through Estonian banks, with a total turnover of 54 million euros. Of these purchases, 4/5 were payments within Estonia made through a bank link service, accounting for 40 million euros in value. The average size of these payments was 42 euros. Credit cards were used more over the internet for making payments for goods and services ordered from other countries. Credit card payments were made on average 235 thousand times a month for a total value of 15 million euros. Only one tenth of these payments were within Estonia. The average credit card payment was 64 euros.

Three methods are used for paying for internet purchases: card payments, internet bank payments through a bank link service, and wallet solutions like PayPal. Paying for purchases made over the internet within Estonia is convenient and safe. It is possible to use a bank link service so that the purchase can be made within the internet bank of the purchaser’s own bank, or else a credit card can be used. When MasterCard or VISA cards are used for internet payments, an additional password is required to ensure security. The payment options for cross-border payments are more limited and the most popular is card payments, though various wallet-solutions are also used. These are provided by various payment institutions and e-money organisations and allow consumers to pay for internet purchases more flexibly.

As internet shopping becomes ever more popular, it should be remembered that the payment solutions offered for paying for purchases are provided by both licensed payment service providers

and by some companies  that have no licence to offer such services. The Estonian Financial Supervision Authority supervises companies with licences, and its website provides information on whether a company offering payment solutions has a licence or not. Consumers using payment solutions offered by companies that are not under supervision do so at their own risk. Research by the European Commission shows that only rarely do internet purchasers have problems with criminal misuse of personal data, bank card data or internet bank passwords. The main worries of internet purchasers are more the difficulty of returning goods and getting reimbursed, problems with the delivery of goods, and inaccurate descriptions of goods on websites. The research also showed that awareness among consumers of the rights of internet purchasers is low.

Recommendations from the European Central Bank to payment service providers should be implemented by February 2015, increasing the security of internet payments around Europe and increasing consumer understanding. The new recommendations will also affect companies selling goods and services over the internet through payment service providers like banks, payment institutions and e-money institutions.

Data from Statistics Estonia show that one in five Estonian residents used the internet for purchases in 2012. The number of purchasers using the internet in Estonia grew by 11% or 24 thousand during 2012.

Information on buying goods and services over the internet can be found on the website of the Consumer Protection Board, which also gives a list of e-shops that do not meet all the legal requirements.

* Eesti Pank has been collecting and publishing statistics on internet purchases made through banks since May 2012.

Source: Bank of Estonia

Tax authorities use Google Street View

Estonian tax authority Maksuamet has followed the example of its Lithuanian colleagues and starting to use Google Maps Street View to detect possible tax evasion, writes Äripäev.

Tõnis Kuuse, head of the information department of the Estonian Tax Authority, said that Google Map Street View is only one of several public tools that tax inspectors are using at their work.

“It’s an additional information source that we can use to check on real estate, for instance in case when a person who has declared minimum income is living in a very valuable house,” says Kuuse.

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Construction volumes increased about a fourth in the previous year

According to the preliminary data of Statistics Estonia, in 2012 the total production of Estonian construction enterprises in Estonia and in foreign countries amounted to 2.1 billion euros, which is 19% more than a year earlier. Construction volumes increased for the second year in a row.

The production value of building construction was 1.2 billion euros and the production of civil engineering works totalled 849 million euros. Compared to 2011, the volume of building construction in real terms increased by 20% and the volume of civil engineering by 16%. The growth is caused mainly by repair and reconstruction work of buildings and was also supported by the civil engineering works. Despite the high growth rates during the last two years, the volume of the construction market in real terms is comparable with the years 2006 and 2008 and remained by more than a sixth smaller than in 2007, the most successful year on the construction market so far.

In 2012, the construction volume of Estonian construction enterprises in foreign countries increased 13%. The growth was mainly caused by building construction. Construction volumes in foreign countries accounted for 11% of the total volume of construction.

The completion of new dwellings which had stayed on decline trend for four years started to grow again in the previous year. According to the data of the Construction Works Register, the number of dwellings completed in 2012 was 1,990, i.e. 72 dwellings more than in 2011. Similarly to the previous years the largest share of completed dwellings was situated in blocks of flats and every second dwelling had two or three rooms. Since 2008, the share of dwellings situated in blocks of flats has continually decreased, which has increased the average floor area per dwelling. In 2012, the average floor area of a completed dwelling was 117 square metres. The majority of completed dwellings were situated in Tallinn, followed by the neighbouring rural municipalities of Tallinn, and Tartu county.

In spite of consumers’ price sensitivity, the demand for new dwellings with good location and quality has continued. Several new developments have appeared on the market, especially among higher buildings (six or more storeys), the construction of which had practically stopped in the intervening years. In 2012, building permits were granted for the construction of 3,035 dwellings, which is nearly a tenth more than a year earlier.

In 2012, the number of completed non-residential buildings was 840 with the total useful floor area of 474,000 square metres – this was primarily made up of new agricultural, commercial and storage premises. Compared to 2011, there was an increase in both the useful floor area and the cubic capacity of completed non-residential buildings.

In the 4th quarter of 2012, the production value of construction amounted to 563 million euros, which is 9% more than in the 4th quarter of 2011, whereas the construction of buildings increased by 16% and the construction of civil engineering works stayed on the same level.

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Investors sue Estonian real estate developer over Moroccon project

Spanish company Property Logic behind which is Estonian businessman Margus Reinsalu and that was developing a luxury real estate project in Morocco has been sued by about 50 foreign investors, writes Eesti Ekspress.

Property Logic is developing Le Jardin de Fleur, a luxury residential development for 1,250 housing units in Saidia, a Moroccon resort on the Mediterranean beach in Morocco.

Investeors claim that the project which raised about 60 million euros in prepayment is stalled and fear that they could lose their investment.

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Foreigners own less than 3 pct of housing in Estonia

According to the 2011 census report, foreigners own 2.3% of housing in Estonia, writes Eesti Päevaleht.

By regions, the highest percentage of foreign-owned housing units are in Narva-Jõesuu, the resort in Northeast Estonia where foreigners, mainly Russians, own 240 housing units or 12.8%.

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Contracts becoming a burden to city government

City of Tallinn is already spending 5% of its annual budget on paying a small group of companies that have won private public partnership or PPP contracts from Tallinn for renovating the capital’s school buildings and building municipal houses, writes Äripäev.

By the new act on financial management of local governments, PPP amounts are included in the local government’s loan burden that cannot exceed 60% of the local government’s net budget revenues. City of Tallinn’s loan burden is at present 55%.
The businessmen who have entered into PPP contracts with the City of Tallinn include Jaanus Otsa, Olaf Herman, Tiit and Toomas Kõuhkna, Aivar Tuulberg and Raivo Rand.

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Tallinn sucking in residents from Northeast Estonia

More than 4,000 people became residents of Tallinn in January alone, mainly as a result of domestic migration from Northeast Estonia, writes Postimees.

Yevgeni Solovjov, Mayor of Kohtla-Järve in Northeast Estonia, says that Tallinn is attracting residents of other counties thanks to its benefits including the free public transport.

“We expected it so it’s no surprise. We don’t have enough jobs in our county and they are moving elsewhere for work,” said Solovjov, adding that while, before, people remained residents of their home counties also when they were working elsewhere, but they are now re-registering themselves in order to use free public transport in Tallinn.

Haldo Oravas, governor of Viimsi municipality, said that Viimsi municipality is offering tax-exemption from land tax. Homeowners in Viimsi who have a property of 1,200 sqm can save between 350 and 400 euros a year.

“I would not be surprised if there are families where the father is registered in Viimsi to get the land tax benefit and the mother is registered now in Tallinn to get free public transport,” he said.

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Real estate market has enliven

According to Statistics Estonia, in 2012, 36,176 purchase-sale transactions of real estate in the total value of 1.7 billion euros were notarised. In 2012, the number of transactions increased by 12% compared to 2011 and the total value of transactions increased by 13%.

Compared to the real estate slump in 2009, the number of transactions increased by 38%, while compared to the boom year 2006, transaction activity is still 40% below the level of that year. In 2012, the average value of a purchase-sale transaction was 47,739 euros, which is 1% bigger than in 2011. The growth of the number of transactions was greatly due to an increase in the number of transactions with apartments.

Transactions with apartments accounted for half of all purchase-sale transactions. The increase in the number of transactions with apartments was affected by the new development market and also by the housing loans sector, as low interest rates have kept the real estate market active. The number of transactions with apartments increased by 17% compared to 2011, while the total value of transactions with apartments increased by more than a quarter. There was a more moderate increase – 8% – in the average price per square metre of an apartment and in the average value of a transaction with an apartment.

Transactions with unimproved registered immovables accounted for 31% and transactions with registered immovables with buildings for 18% of all purchase-sale transactions of real estate. Compared to 2011, the average value of a transaction with an unimproved registered immovable increased 7%, while the average value of a transaction with a registered immovable with buildings decreased 5%.

Compared to 2011, the average value of a purchase-sale transaction with an apartment increased the most in Western Estonia (24%). The increase was 12% in North-Eastern Estonia, 8% in Southern Estonia and 7% in Northern Estonia. In Central Estonia the average value of a purchase-sale transaction with an apartment increased 6%.

9,921 purchase-sale transactions of real estate were notarised in Tallinn, which is 14% more than in 2011. The number of notarised transactions was 884 in Pärnu, which is 26% more than in 2011; and 1,938 in Tartu, which is 25% more than in 2011.

In 2012 the average price per square metre of an apartment in a purchase-sale transaction was 760 euros, which is 8% more than in 2011. The price per square metre increased 7% in Tallinn, 8% in Tartu and 2% in Pärnu.

Source: Statistics Estonia
See graph here

The most densely populated area in Estonia is the Lasnamäe city district

According to Statistics Estonia, population density is the highest in the Lasnamäe district of Tallinn city, specifically in the Linnamäe-Kärberi streets area with 15,800 inhabitants per square kilometre, as shown by the 1 km x 1 km grid map of population density created on the basis of the 2011 Population and Housing Census.

Almost 25,000 square kilometres (55%) of the total area of Estonia are uninhabited. A tenth of the Estonian territory is sparsely populated, with only 1–2 inhabitants per square kilometre. With 15,800 inhabitants per square kilometre, the Linnamäe-Kärberi streets area in Lasnamäe city district has the highest population density. There are more than 15,000 inhabitants per square kilometre also in the Laagna sub-district and Mustamäe city district (Vilde-Mustamäe tee streets area). The average population density in Estonia is 30 inhabitants per square kilometre. In the previous census in 2000, the population density was 32 inhabitants per square kilometre. The average population density in EU countries is 117 inhabitants per square kilometre. Malta is the most densely populated EU country with 1,316 inhabitants per square kilometre. Compared to Estonia, only Scandinavian countries and Iceland have lower population density. In Latvia and Lithuania the average population density is 36 and 52 inhabitants per square kilometre, respectively.

The grid map based on the 2011 census visualizes the residential distribution of the Estonian population. Larger cities and their hinterlands can clearly be distinguished on the grid map. This distributional pattern is influenced by natural conditions – large wetlands and woodlands are uninhabited, and population density is greater near the roads.

A grid map is a map where statistical data are presented in uniform territorial units, i.e. grids. The grid map is based on geo-referenced statistical data collected during the census. These data enable a more detailed spatial analysis and comparison of population distribution over time and space, irrespective of changes in administrative boundaries. Grid maps are mainly used for thematic planning and preparation of development plans.

Based on the 2011 Population and Housing Census, 1 km x 1 km grid data are available for the territory of Estonia, 500 m x 500 m grid data for cities and their hinterlands, and 100 m x 100 m grid data for the cities of Tallinn, Tartu, Pärnu, Narva and Kohtla-Järve.

See the map of Statistics Estonia here

Construction price index increased in 2012

According to Statistics Estonia, in 2012 the construction price index rose 4.6% compared to the average of 2011.

Labour costs increased by 6.3%, costs on building machines by 7.2% and costs on building materials by 3.7% compared to the previous year.

In the 4th quarter of 2012 compared to the 3rd quarter, the change of the construction price index was 0.8% and compared to the 4th quarter of 2011 – 3.7%. Compared to the 3rd quarter, the index was mainly influenced by more expensive labour costs, which gave over three quarters of the quarterly change. Compared to the 4th quarter of 2011, the construction price index was mainly influenced by more expensive materials, which gave more than a half of the total increase of the index.

Repair and reconstruction work price index rose 5.2% in 2012 compared to the average of 2011, while labour costs increased by 5.9%, costs on machines by 9.3% and costs on materials by 4.5%.

The change of the repair and reconstruction work price index was 0.8% in the 4th quarter of 2012 compared to the 3rd quarter, and 4.0% compared to the 4th quarter of 2011.

The calculation of the construction price index covers four groups of buildings – detached houses, blocks of flats, industrial buildings and office buildings, as well as office buildings covered by the repair and reconstruction work price index. The construction price index expresses the change in the expenditures on construction taking into consideration the price changes of basic inputs: labour force, building materials and building machines.

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