Expert: Scandinavian Real Estate Market Decline Makes Building Cheaper in Estonia
According to Toomas Tauk, CEO of Puumarket, the largest timber retailer in the Baltic region, the downturn in the construction and real estate markets in Scandinavian countries affects building material prices and labor availability in Estonia as well.
"Construction market revenues in Finland and Sweden have fallen by 30-40 percent, which is bad news for our sawmills and timber house exporters, but gives local businesses and homeowners an opportunity to build and renovate on favorable terms over the years," said Tauk.
"The decrease in demand from neighboring markets has created a surplus of wood materials, and the price of energy needed for production has also fallen, which is why many building materials are cheaper compared to a year ago. Prices for dry building timber and metal reinforcement have fallen 40-50 percent from their peak, and there are no longer any delivery problems either," Tauk said.
"Due to decreased exports to Scandinavia, it is also easier to find a builder for yourself right now. Compared to Scandinavia, the Estonian construction market is in relatively good shape and if you have the means and opportunity, then in terms of both materials and labor, it seems like a favorable time. Internal Estonian building materials sales are going well, and although there are fewer new developments, people are renovating more on their own and compared to the same time last year, sales volumes have grown by about ten percent," Tauk commented.
"Future building material prices depend on the overall state of the economy. If banks' lending conditions improve, then construction volumes and demand will also recover. The material price floor is probably where we are right now," said Tauk.
