The prices of Estonian apartments increased by 4.5 pct in 2016

According to Statistics Estonia, the Dwelling Price Index increased by 4.7% in 2016 compared to the average of 2015. In the annual comparison, the prices of apartments increased by 4.5% and the prices of houses by 5.4%.

The annual change of the Dwelling Price Index was 8.5% in 2011, 7.3% in 2012, 10.7% in 2013, 13.7% in 2014 and 6.9% in 2015.

The prices of apartments increased in 2016 compared to average of 2015 in all three areas under observation: by 3.4% in Tallinn, by 5.4% in areas bordering Tallinn with Tartu and Pärnu cities and by 8.6% in the rest of Estonia.Dwelling Price Index, change over previous year, 2006–2016

In the 4th quarter of 2016 compared to the 3rd quarter, the Dwelling Price Index increased by 1.2% and compared to the 4th quarter of 2015 by 7.7%.

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

The Owner-Occupied Housing Price Index increased by 3.5% in 2016 compared to the average of 2015.

In the 4th quarter of 2016, the Owner-Occupied Housing Price Index changed by -0.1% compared to the 3rd quarter and by 8.5% compared to the 4th quarter of 2015.

The Owner-Occupied Housing Price Index expresses the changes in the prices of the acquisition of dwellings new to the household sector and other goods and services that households purchase in their role as owner-occupiers. The index consists of four parts: the acquisition of dwellings, other services related to the acquisition of dwellings, major repairs and maintenance, and insurance connected with dwellings.

The Owner-Occupied Housing Price Index is published on the base 2010 = 100. The time series starts from the 1st quarter of 2005; major repairs and maintenance are included from the 1st quarter of 2007 and insurance connected with dwellings is included from the 1st quarter of 2012. The annual index is calculated as the average of four quarters.

For the statistical activity “Dwelling price index and owner-occupied housing price index”, the main representative of public interest is the Ministry of Finance commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Estonian general government debt declined

According to the preliminary data of Statistics Estonia, in 2016, the Estonian general government surplus was 0.3% and the gross debt level was 9.5% of the gross domestic product.

At the end of 2016, the total revenues of the general government exceeded the expenditures by 56.7 million euros, accounted as the Maastricht deficit criteria, and all sub-sectors ended the year positively. By the end of 2016, the surplus of revenues of the central government sub-sector was 13.8 million euros and the consolidated budget of the local government sector was 35.8 million euros in surplus. The budget surplus of social security funds decreased to 7.1 million euros, continuing the declining trend for the fifth year in a row.

The consolidated debt of the general government (Maastricht debt) amounted to nearly 2 billion euros by the end of 2016, having fallen 3% compared to 2015. The local governments as well as the central government contributed to the fall of the debt level. At the end of 2016, the debt of the central government sub-sector totalled 2.2 billion euros of which 822 million euros were liabilities towards other sub-sectors. The local governments’ debt accounted for 0.7 billion euros. Social security funds did not contribute to the debt of the general government sector.

The loan liabilities of the central government decreased by 3% and the volume of long-term securities issued by the public-legal institutions and foundations belonging to the central government decreased by 7%. The share of foreign debt in the central government’s loan liabilities was 52%.

The overall debt level of the local governments fell by 3% compared to 2015. The volume of long-term securities decreased by 2% over the year and the liabilities of loans decreased by 3%. Liabilities towards the rest of the world accounted for 21% of the local governments’ debt.

Surplus/deficit of the general government in Estonia by sub-sectors, 2008–2016

In Estonia, the general government sector comprises three sub-sectors: 1) central government (state budget units and extra-budgetary funds, foundations, legal persons in public law); 2) local governments (city and rural municipality governments with their subsidiary units, foundations); 3) social security funds (Estonian Health Insurance Fund, Estonian Unemployment Insurance Fund).

Source: Statistics Estonia

Corporate and household deposits up 10 pct year-on-year in February

  • New loans to companies dropped somewhat in early 2017 compared to a year earlier
  • New housing loans grew by 10% in February year-on-year
  • Deposits grew faster than the banks’ loans and lease portfolio

The portfolio of loans and leases to companies and households increased in February by 57 million euros to 17.2 billion euros, gaining 6.3% year-on-year.

The growth in corporate loans and leases taken from banks and leasing companies operating in Estonia slowed somewhat in early 2017 but nevertheless remained solid. Corporate loan and leasing portfolio gained 6.8% in February compared to year ago. As corporate borrowing from abroad and from sources other than banks and leasing companies has decreased, the overall level of corporate debt has remained more or less the same. During the first two months of 2017, the volume of new loans to companies has dropped from a year ago.

The housing loan portfolio grew at a pace similar to January, gaining 5.6% year-on-year as at the end of the month. 76 million euros worth of new housing loans were issued in February, up around 10% year-on-year. Lending increased in terms of the number of contracts as well as the average value of contracts. Albeit slowing down somewhat during the first months of 2017, car leasing continues to grow at a fast pace (up 14% in February year-on-year). Overdraft and credit card loans rose 1.2% in February compared to a year earlier.

The volume of loans overdue over 60 days grew slightly, continuing the trend from January, but remained low. Although the volume of loans overdue over 60 days increased to 188 million euros in February, it accounts for only a small share of the loan portfolio (1.2%).

Corporate and household deposits grew strongly, up to almost 10% from a year earlier, which shows that deposits have grown faster than the banks’ loan portfolio. Household deposits increased by around 116 million euros in February, up 8% year-on-year. Corporate deposits showed a 11% gain on the year earlier.