The prices of apartments increased by 13 pct in a year

According to Statistics Estonia, the Dwelling Price Index increased by 10.7% in 2013 compared to the average of the previous year. Compared to 2012, the prices of apartments increased by 13.3% and the prices of houses by 4.1%.

The annual change of the Dwelling Price Index was 7.3% in 2012 and 8.5% in 2011.

In the 4th quarter of 2013 compared to the 4th quarter of 2012, the Dwelling Price Index changed by 15.6%, the prices of apartments increased by 20.2% and the prices of houses by 4.9%. The prices of apartments increased in all three areas under observation: by 21.4% in Tallinn, by 23% in areas bordering Tallinn and in Tartu and Pärnu cities and by 7.7% in the rest of Estonia.

In the 4th quarter compared to the 3rd quarter of 2013, the Dwelling Price Index increased by 2.6%, the prices of apartments increased by 3.7% and the prices of houses decreased by 0.1%. In the 4th quarter compared to the previous quarter, the price index of apartments increased by 3.9% in Tallinn, by 2.6% in areas bordering Tallinn and in Tartu and Pärnu cities and by 5.2% in the rest of Estonia.

The Dwelling Price Index expresses the changes in the transaction square metre prices of dwellings purchased by households. The Dwelling Price Indices are compiled for apartments and houses (including detached, semi-detached and terraced houses).

The Dwelling Price Index is published on the base 2010 = 100. The time series start from the 1st quarter of 2005. The annual index is calculated as the average of four quarters.

Dwelling Price Index, change over previous year, 2006–2013

Diagram: Dwelling Price Index, change over previous year

Source: Statistics Estonia

Billion-Euro development planned near the airport

The Ülemiste City business campus on the territory of the former Dvigatel factory near the Lennart Meri airport continues to expand, hoping to boast a multifunctional urban space with 5,000 new residents in 15 years.

Presenting the future visions for the campus today, the developers demonstrated the architectural competition’s winning entry, which will see the complex expand by a third. The estimated cost of the project is a billion euros, the TallinnCity, the online edition of the daily Postimees, reported.

The architectural design includes 200,000 square meters of office space (70,000 of which has already been completed), and 125,000 square meters of residential space. Extensive parking space, a green belt and various recreational facilities have also been planned.

The development of Ülemiste City began in 2005, and according to an agreement made in 2010, two thirds of the complex is developed by Mainor Ülemiste AS, while a third is developed by Technopolis Ülemiste AS.

Source: Estonian Review / ERR

Construction volumes haven’t changed

According to the preliminary data of Statistics Estonia, in 2013 the total production of Estonian construction enterprises in Estonia and in foreign countries amounted to 2.2 billion euros, which is 0.7% more than in 2012. If only the Estonian construction market is considered, the construction volumes grew 2%.

The production value of building construction was 1.3 billion euros and the production of civil engineering works totalled 897 million euros. Compared to 2012, the volume of building construction and the volume of civil engineering stayed on the level of the previous year

(the growth was 0.7% and 0.6%, respectively). The volume of the construction market in 2013 is comparable with the years 2006 and 2008, but was more than a sixth smaller than in 2007, the most successful year on the construction market so far.

The growth on the domestic construction market was mainly caused by the upturn in new building construction and was also supported by civil engineering. The repair and reconstruction work in building construction stayed on the level of the previous year

In 2013, the construction volume of Estonian construction enterprises in foreign countries decreased 13% – there was a decrease in the construction of buildings as well as in civil engineering. Construction volumes in foreign countries accounted for 9% of the total volume of construction.

The number of dwelling completions increased for the second year in a row. According to the data of the Register of Construction Works, in 2013, the number of dwelling completions was 2,079, i.e. 90 dwellings more than the year earlier. Similarly to 2012, the largest share of completed dwellings were situated in one-family, two-family or terraced houses and every second dwelling had four or more rooms. In 2013, the average floor area of a completed dwelling was 120 square metres, which is also one of the biggest in the last fifteen years. The majority of completed dwellings were situated in Tallinn, in the neighbouring rural municipalities of Tallinn and in Tartu city.

There is still a demand for new dwellings with a good location and high quality. In 2013, building permits were granted for the construction of 3,049 dwellings. Although the number of dwellings to be built grew only a little compared to the previous year, there are several new developments appearing on the market, especially higher buildings (the construction of which had practically stopped in the intervening years), which helps to abate the demand for flats in Tallinn.

In 2013, the number of completed non-residential buildings was 887 with a useful floor area of 607,000 square metres – this was primarily made up of new storage, agricultural and industrial premises. Compared to 2012, the useful floor area as well as the cubic capacity of completed non-residential buildings increased.

In the 4th quarter of 2013, the production value of construction amounted to 566 million euros, which is 4% less than in the 4th quarter of 2012, whereas the construction of buildings increased by 2% and the construction of civil engineering works decreased more than a tenth.

Construction volume index, 2000–2013 (2010 = 100)

Construction volume index, 2000–2013

 

Source: Statistics Estonia

Estonian retailers are hopeful about the future

Half of retailers expect revenues to grow and the barometer of service and industrial companies shows positive signs.

The only exception is construction, writes Äripäev.

Read more from BBN

The total number of real estate transactions increased last year

According to Statistics Estonia, in 2013, 41,650 purchase-sale transactions of real estate in the total value of 2.0 billion euros were notarised. In 2013, the number of transactions increased by 15% compared to 2012 and the total value of transactions increased by 18%.

The rise of the Estonian real estate market continued in 2013 and the number of transactions was the highest since the economic downturn. Compared to the boom year 2006, transaction activity was still 30% lower. In 2013, the average value of a purchase-sale transaction was 48,900 euros, which is 2% more than in 2012. 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 a half of all purchase-sale transactions. People’s growing confidence, low interest rates and the gradual addition of new developments have kept the real estate market active.  The number of transactions with apartments increased 15% compared to 2012, while the total value of transactions with apartments increased by a quarter.

Compared to 2012, the average value of purchase-sale transactions with apartments increased the most in Southern Estonia and in North-Eastern Estonia (16% in each). In Northern Estonia transactions were 10% more expensive, on average, and in Central Estonia average transaction value remained at the level of 2012. The average value of a transaction decreased only in Western Estonia (which had shown the largest growth in 2012), by more than a tenth.

In 2013 the average price per square metre of an apartment in a purchase-sale transaction was 840 euros, which is 10% more than in 2012. The price per square metre increased 14% in Tallinn, 13% in Tartu and 5% in Pärnu.

Transactions with unimproved registered immovables accounted for 31% and transactions with registered immovables with buildings for 19% of all purchase-sale transactions of real estate. Compared to 2012, the average value of a transaction with an unimproved registered immovable remained at the same level, while the average value of a transaction with a registered immovable with buildings decreased 5%.

Trend of notarised purchase-sale transactions, 1st quarter 2003 – 4th quarter 2013

Trend of notarised purchase-sale transactions

Source: Statistics Estonia

Foreigners account for fifth of real estate transactions in Tallinn

Last year, one in every fifth real estate transaction in Tallinn was made by a foreigner, reported ERR.

During the year, foreigners made 2,331 real estate transactions in 2013 that is slightly more than a year earlier, according to a survey of 1Partner Kinnisvara.

Read more from BBN

Developer scraps 100 MEUR shopping mall project in Tallinn

Real estate developer E.L.L. Kinnisvara which belongs to Merko, the largest construction company in the Baltic states, unexpectedly announced on Friday that it will not go ahead with developing the major shopping center project known as Panorama City to be built near Tallinn Song Festival Grounds, reports Äripäev.

Read more from BBN

Former project manager of RIMI suspected of major bribery

Central criminal police is suspecting Tiit Elias, former project manager of supermarket chain RIMI, of having received more than 600,000 euros in bribe, reports Postimees.

Elias who worked for five years as project manager of RIMI was handling procurement for real estate developments of RIMI in Estonia.

Read more from BBN

The construction price index increased by 5.2 pct in 2013

According to Statistics Estonia, in 2013 the construction price index rose 5.2% compared to the average of 2012.

Labour costs increased by 13.4%, costs of building machines by 4.7% and costs of building materials by 1.2% compared to the previous year.

In the 4th quarter of 2013 compared to the 3rd quarter, the change of the construction price index was 0.3% and compared to the 4th quarter of 2012 the change was 4.7%. Compared to the 3rd quarter, the index was mainly influenced by more expensive labour costs, which accounted for over three quarters of the quarterly change. Compared to the 4th quarter of 2012, the construction price index was also mainly influenced by increased labour costs, which accounted for 80% of the total increase.

The repair and reconstruction work price index rose 6.1% in 2013 compared to the average of 2012 – labour costs increased by 13.3% and costs of machines by 0.2%, while costs of materials decreased by 0.2%.

The change of the repair and reconstruction work price index in the 4th quarter of 2013 was 0.3% compared to the 3rd quarter, and 5.7% compared to the 4th quarter of 2012.

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

Read more from Statistics Estonia

SEB: construction sector suffers a major slowdown in 2014

The SEB Business Barometer projects economic growth in 2014 will be led by industry, wholesalers and exporters, while the construction sector suffers a major slowdown.

According to the study released today, the share of Estonian companies surveyed that are planning investments in excess of 30,000 euros decreased from 48 percent for this year to 41 percent for next year.

The share of those planning innovation activity decreased from 62 percent to 59 percent. Size seems to matter here, as the innovation leaders will be larger firms and industrial firms – the latter will also provide a predicted 30 percent of new jobs next year. By region, innovation will be greatest in Saaremaa and Hiiumaa (even though Ida-Viru County leads the industrial sector), according to the findings.

On the other hand, firms focused on the domestic market had less significant plans for investment and innovation.

The construction sector faces harder times ahead, with one in four companies predicting a decline in turnover, and accounting for as much as 40 percent of next year’s job loss. On a positive note, 92 percent of companies overall predict growth in turnover in 2014, thanks largely to domestic demand.

The greatest growth is expected in Pärnu County, where every third company expects turnover to grow by over 15 percent.

The share of exporters expecting to expand to existing or new markets was 31 percent, down by 5 percent from the year before.

Source:  ERR via Estonian Review

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