The Dwelling Price Index continued to increase in 2Q

According to Statistics Estonia, in the 2nd quarter of 2017, the Dwelling Price Index changed by 0.3% compared to the 1st quarter and by 4.8% compared to the 2nd quarter of 2016.

Compared to the previous quarter, the prices of apartments increased by 0.1% and the prices of houses by 0.8%.

Compared to the 2nd quarter of 2016, the prices of apartments have increased by 5.1% and the prices of houses by 4%. Compared to the 2nd quarter of the previous year, the prices of apartments increased by 5% in Tallinn, by 7.7% in areas bordering Tallinn with Tartu and Pärnu cities, and by 0.4% in the rest of Estonia.

The Dwelling Price Index expresses the changes in square metre prices of transactions made by households for the purchase of dwellings. The Dwelling Price Indices have been compiled for apartments and houses (detached, semi-detached and terraced houses).Dwelling price index, 1st quarter 2005 – 2nd quarter 2017

In the 2nd quarter of 2017, the Owner-Occupied Housing Price Index changed by -1.7% compared to the 1st quarter and by 3% compared to the 2nd quarter of 2016.

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.

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
Advertisements

Construction volumes increased in 2Q

According to Statistics Estonia, in the 2nd quarter of 2017 compared to the same quarter of the previous year, the total production of Estonian construction enterprises in Estonia and foreign countries increased 18%. Taking into account only the Estonian construction market, the construction volumes increased 25%.

In the 2nd quarter of 2017, the production value of construction enterprises amounted to 627 million euros, of which the production value of building construction was 391 million euros and the production value of civil engineering was 236 million euros. Compared to the 2nd quarter of 2016, the volume of building construction increased 9% and the volume of civil engineering by more than a third.

Domestic construction market was affected the most by civil engineering, which resumed growth at the beginning of this year. Building construction also continued to grow. Compared to the same period of the previous year, construction volumes increased in new building construction as well as in repair and reconstruction work.

The construction volume of Estonian construction enterprises in foreign countries decreased nearly a half compared to the 2nd quarter of 2016, mainly on account of smaller volume of building construction. Construction volumes in foreign countries accounted for 6% of the total volume of construction in the 2nd quarter of 2017; the share in the same period a year ago was 12%.

According to the Register of Construction Works, in the 2nd quarter of 2017, the number of dwelling completions was 1, 422, which is 97 dwellings more than in the same period a year ago. Approximately a half of the completed dwellings were in blocks of flats situated in Tallinn.

There is still demand for new high-quality dwellings in a good location. In the 2nd quarter of 2017, building permits were granted for the construction of 2,066 dwellings, which is over a tenth more than in the 2nd quarter of 2016. The most popular type of building was a block of flats.

The number of completed non-residential buildings was 243 with a useful floor area of 216,000 square metres – these were primarily new storage and industrial premises. Compared to the 2nd quarter of 2016, both useful floor area and volume of completed non-residential buildings increased.

Construction volume index and its trend, 1st quarter 2003 – 2nd quarter 2017

The statistics are based on the questionnaire “Economic activity, quarter”, the submission date of which was 21 July 2017. Statistics Estonia published the quarterly summary in 26 working days. For the statistical activity “Financial statistics of enterprises (quarterly)”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

The Dwelling Price Index most influenced by apartments in Tallinn

According to Statistics Estonia, in the 1st quarter of 2017, the Dwelling Price Index changed by -0.1% compared to the 4th quarter of 2016 and by 7.7% compared to the 1st quarter of 2016.

Compared to the previous quarter, the prices of apartments increased by 0.7% and the prices of houses decreased by 2.1%. Compared to the 4th quarter of 2016, the prices of apartments increased by 1.1% in Tallinn and by 3.2% in areas bordering Tallinn with Tartu and Pärnu cities, but decreased by 5.8% in the rest of Estonia.

Compared to the 1st quarter of 2016, the prices of apartments have increased by 6.9% and the prices of houses by 9.9%. Compared to the 1st quarter of the previous year, the prices of apartments increased by 7.9% in Tallinn, by 4.9% in areas bordering Tallinn with Tartu and Pärnu cities, and by 5.6% 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 have been compiled for apartments and houses (detached, semi-detached and terraced houses).

In the 1st quarter of 2017, the Owner-Occupied Housing Price Index changed by -2.2% compared to the 4th quarter of 2016 and by 7.4% compared to the 1st quarter of 2016.

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.

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

Construction volumes increased 18 pct in 1Q this year

According to Statistics Estonia, in the 1st quarter of 2017 compared to the same quarter of the previous year, the total production of Estonian construction enterprises in Estonia and foreign countries increased 20%. Taking into account only the Estonian construction market, the construction volumes increased 18%. It is the biggest increase in construction volumes in the last five years.

In the 1st quarter of 2017, the production value of construction enterprises amounted to 453 million euros, of which the production value of building construction was 343 million euros and the production value of civil engineering was 110 million euros. Compared to the 1st quarter of 2016, the volume of building construction increased 16% and the volume of civil engineering more than a third.

The growth on domestic construction market was supported by civil engineering, which resumed growth after the decline that began in 2014. Building construction, which has been stimulating the construction market, continued to grow also at the beginning of this year. Compared to the same period of the previous year, construction volumes increased in new building construction as well as in repair and reconstruction work.

The construction volume of Estonian construction enterprises in foreign countries increased nearly a half compared to the 1st quarter of 2016, affected mainly by growth in the construction of buildings. Construction volumes in foreign countries accounted for 11% of the total volume of construction in the 1st quarter of 2017.

According to the Register of Construction Works, in the 1st quarter of 2017, the number of dwelling completions was 1, 264, which is 271 dwellings more than in the same period a year ago. Half of the completed dwellings were in blocks of flats situated in Tallinn.

There is still a demand for new high-quality dwellings in a good location. In the 1st quarter of 2017, building permits were granted for the construction of 1,764 dwellings, which is over a third more than in the 1st quarter of 2016. The most popular type of building was a block of flats.

The number of completed non-residential buildings was 264 with a useful floor area of 265,000 square metres – these were primarily new commercial and storage premises. Compared to the 1st quarter of 2016, both the useful floor area and the volume of completed non-residential buildings increased.

Construction volume index and its trend, 1st quarter 2003

The statistics are based on the questionnaire “Economic activity, quarter”, the submission date of which was 20 April 2017. Statistics Estonia published the quarterly summary in 24 working days. For the statistical activity “Financial statistics of enterprises (quarterly)”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Construction price index is up again

According to Statistics Estonia, the change of the construction price index in the 1st quarter of 2017 was 0.4% compared to the 4th quarter of 2016, and 0.7% compared to the 1st quarter of 2016.

In the 1st quarter of 2017, compared to the same quarter of the previous year, the construction price index was primarily affected by an increase in the costs of building materials and labour, which accounted for more than 60% and over a third of the total increase of the index, respectively.

Compared to the previous quarter, costs of building materials increased by 0.4%, costs of building machines increased by 0.5% and labour costs increased by 0.5%.

In the 1st quarter of 2017, the change of the repair and reconstruction work price index was 0.4% compared to the 4th quarter of 2016 and 0.5% compared to the 1st quarter of 2016.

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.

Change in the construction price index, 1st quarter 2017
4th quarter 2016 – 1st quarter 2017, % 1st quarter 2016 – 1st quarter 2017, %
TOTAL 0.4 0.7
labour force 0.5 0.7
building machines 0.5 0.3
building materials 0.4 0.7
Index of detached houses 0.3 0.5
Index of blocks of flats -0.1 0.6
Index of industrial buildings 0.5 0.3
Index of office buildings 0.6 0.9

 

Change in the repair and reconstruction work price index, 1st quarter 2017
4th quarter 2016 – 1st quarter 2017, % 1st quarter 2016 – 1st quarter 2017, %
TOTAL 0.4 0.5
labour force 0.1 0.4
building machines 1.0 1.9
building materials 0.4 0.4

For the statistical activity “Construction price index”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting this statistical activity.

Source: Statistics Estonia

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

Connections between housing prices and housing credit in Estonia

This paper of Bank of Estonia investigates the mutual dependence between housing prices and housing credit in Estonia, a country which experienced rapid debt accumulation during the 2000s and big swings in house prices during that period. We use Bayesian econometric methods on data spanning 2000–2015. The estimations show the interdependence between house prices and housing credit. More importantly, housing credit shocks had a stronger effect on house prices in the period of declining credit turnover. The asymmetry in the linkage between housing credit and house prices highlights important policy implications, in that if central banks increase capital buffers during good times, they can release credit conditions during hard times to alleviate the negative spillover into house prices and the real economy.

Read more here (2/2017 Juan Carlos Cuestas, Merike Kukk. Asymmetries in the interaction between housing prices and housing credit in Estonia)