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HomeEstoniaLuminor: People still aspiring to own their home in Estonia despite economic...

Luminor: People still aspiring to own their home in Estonia despite economic challenges

Data on issued mortgage loans indicate that acquiring a home remains a priority for people even in the current challenging economic climate, somewhat aided by the real estate price surge halting, according to Tanel Rebane, Luminor’s head of retail banking in the Baltic states.

“Looking at the averages over the last six months, we are back to around the levels of 2021, when the monthly turnover of home loans was at about 150 million euros,” Rebane said in a press release. “This is roughly a fifth lower compared to the peak months of the real estate price rally in 2022 and 2023, thus we can say that we are back to normal.”

He noted that the current volume of issued home loans clearly reflects Estonians’ desire for home ownership — whether by moving from a rental apartment to their own home or acquiring a new and larger dwelling if needed.

“A recent public opinion survey commissioned by Luminor and conducted by Norstat also showed that a large share of respondents are considering purchasing a new home or renovating their existing one. In response to the question of what they are dissatisfied with in their current housing situation, 37 percent expressed a desire for a new home or renovation. Nearly a third — 31 percent — indicated a need for more spacious living quarters,” he highlighted.

In recent months, the real estate market has noticeably calmed, and while prices have not significantly decreased, they have stabilized, becoming somewhat more attractive to buyers, according to Rebane.

“Even though prices have stabilized, the cost of real estate, especially in Tallinn, remains very high. For instance, an average salary can only purchase a relatively small apartment. Nonetheless, given the opportunity, Estonians prefer living in their own homes and are willing to settle for less with the hope of upgrading in the future,” he added.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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