In three months court bailiffs have auctioned about two hundred foreclosured private properties in Estonia and expect a record year. However, most bailiffs agree that it is still too early to say whether the busy start of the year is a sign of full-blown crisis as people are unable to repay their housing loans, writes Eesti Päevaleht.
Court bailiff Mati Kadak says that there is reason to talk about a crisis only if real estate prices fall so low that banks will massively demand new securities from borrowers.
“If the cost of living continues to go up sharply, borrowers who acquired real estate when prices were half higher than today could find themselves in trouble. But it is clearly too early to say that,” said Kadak.
Loan advisers say that people who are trying to repay one loan by taking another has been growing quickly.
Bulgaria tops the index as the country with the greatest annual price growth – 33.7 percent. The price of housing in Singapore grew by 31.3 percent in the fourth quarter of 2007, whilst the price of housing in Russia grew by 30 percent, when compared to the fourth quarter of 2006.
A year ago, all three of the Baltic states registered rapid increases in the price of housing. In the 4th quarter of 2006, the price of housing in Latvia increased by 66.6 percent, in Estonia – by 23.8 percent, and in Lithuania – by 23 percent.
The Knight Frank global house price index shows that while property prices in Europe and America appear to be suffering from the downturn in economic conditions, prices in Asia and elsewhere, notably Singapore and Hong Kong, are performing very well, said Liam Bailey, head of residential research at Knight Frank.
According to Statistics Estonia, the industrial production in February 2008 increased compared to January as well as compared to February of the previous year.
In comparison with February of the previous year, the industrial production increased 3%, in manufacturing 5%. The growth in manufacturing was mainly influenced by the increase in the production of metal products, chemicals and electrical machinery, mainly due to the increase in exports. The share of exports in the manufacturing of chemicals and electrical machinery was over 80%. The share of exports in the total manufacturing has been growing continuously and exceeded 60% in January and February 2008.
The decrease was observed in food production, where the production of milk products and beverages fell about 20% compared to February of the previous year. In the manufacturing of food, which is the leader in price increase, the prices rose 20% during the year, in the manufacturing of milk products the increase was more than 40%, in the manufacturing of grain mill products — more than 60%. The decrease in the production of beverages was also affected by the raise of excise taxes which significantly decreased the sale of strong alcoholic beverages. Compared to February of the previous year, the production of building materials fell 18% in connection with a slowdown in construction activities. The downward trend continued in the manufacturing of wood, the production of furniture also decreased.
In February 2008, compared to February of the previous year, the production of electricity decreased 3%, the production of heat 23%. The decrease in electricity production was caused by the fall in exports and partly replacement of own production with imports.
The trend of volume index of production in manufacturing, January 1998 – February 2008
Change in volume index of industrial production, February 2008
|Economic activity||Change compared to
|Change compared to corresponding
month of previous year
|manufacture of food products and beverages||-0.4||-3.1||-4.5|
|manufacture of wood and wood products||3.9||-0.9||-2.5|
|manufacture of fabricated metal products||3.5||6.7||4.0|
|manufacture of electrical machinery||8.0||38.0||22.8|
|manufacture of building materials||2.9||-16.8||-17.8|
|manufacture of chemicals and chemical products||11.6||21.9||19.8|
|manufacture of furniture; manufacturing not elsewhere classified||-0.5||-2.7||-4.9|
|manufacture of radio, television and communication equipment and apparatus||2.0||15.6||15.6|
|manufacture of textiles||-5.5||3.8||1.6|
a In case of the seasonally adjusted volume index, the impact of the differing numbers of working days in a month and seasonally recurring factors has been eliminated. It is calculated only in comparison with the previous period.
b In the case of the working-day adjusted volume index, the impact of the differing number of working days in a month has been eliminated. It is calculated only in comparison with the corresponding period of the previous year.
Source: Statistics Estonia