Estateguru: Momentum in Lithuanian and Latvian Real Estate Markets, Estonia More Balanced
Estateguru – Europe's largest platform mediating real estate-backed loans – continues to see differences in the behavior of Baltic developers. Both the number of inquiries and loan volumes are moving upwards among our neighbors, while in Estonia they are still moving at a more leisurely pace. Here, people tend to look further into the future. This reflects the different sentiment in the markets well.
According to Daniil Aal, recently appointed as Estateguru's next CEO, developers in Estonia behave very rationally and are cautious because there is a considerable inventory of unrealized properties. "In Estonia, people plan far ahead and carefully monitor consumer behavior. At the same time, in Lithuania we have already seen growth over the last four quarters, and in Latvia the trend is also upward," explains Aal.
Tarmo Kase, member of the board of Ober-Haus, confirms that there is no major growth in the local market, but it would also be misleading to talk about a crisis: "In Tallinn, approximately 19 transactions per 1,000 inhabitants per year continue to be conducted, which is almost identical to Riga and Vilnius. The average number of transactions is stable – approximately 700 transactions per month. However, while Vilnius has seen 50% growth and Riga 30%, Tallinn remains below 20%. Consumer confidence is low in Estonia, inflation is rapid, and government tax policy has dampened purchasing power. The focus is on need-based purchases and there is a preference for apartments that are 10+ years old but renovated in good condition," comments Kase.
According to Daniil Aal, there are also clearly positive notes. For example, among investors who lend capital to real estate developers, there is visible growth in activity. "Comparing, for example, the last two quarters of last year with the first two quarters of this year, deposits and also the volume of newly added active investors on the platform have grown," adds Aal. According to him, investing through Estateguru has been positively affected by falling interest rates on term bank deposits and the recent volatility of stock markets, which motivates people to consider alternatives.
In total, more than 33 million euros worth of real estate-backed loans were issued through the Estateguru platform in the first half of the year. 95% of loans issued through Estateguru in the first half of the year are performing well. This means that borrowers are fulfilling their obligations according to the agreement. If you compare this to the figures of the last two years, it is in the same range. Therefore, no changes in loan behavior are visible, which is good news for investors.
Over ten years, Estateguru has financed over 1,500 real estate-backed loans in Estonia with a total volume of 385 million euros, of which 346 million has already been repaid to investors.
