After that broke out in Finland in the 1990`s economic crisis, it took seven years to return the property prices in the pre-crisis level. Estonia, given this experience, will require not less time.
Make predictions for real property - would be like guessing the tea leaves: no one knows for sure what the future brings. But if we start from the experience of Finland, Estonia expects a slow and difficult recovery.
"Of course, when prices start to rise, expect that growth will be as powerful as in 2004-2006, is not necessary", - said the head of real estate bureau 1Partner Kinnisvara Martin Wachter. According to him, the rapid growth interferes with the uncertainty of potential buyers, who fear losing their jobs.
As the market in Finland
In general, most experts are of the opinion that the Estonian real estate market will behave the same way as the real estate market in Finland since erupted there in 1990 - 1993`s crisis.
To verify this, we turn to two statistical indicators. First, let`s see how ten years since the crisis has changed the price of square meter of housing in the homes of old buildings in Finland. The second indicator is the price per square meter living space in Estonia on the basis of which the firm expects to Pindi Kinnisvara price index since the beginning of the crisis and before the end of 2009.
Charts give a fairly good idea of what was happening in real estate markets of both countries during the crisis.
Trend of incidence was fairly similar. However, the chart relating to Finland, it is seen as property prices reaching the bottom, began to grow and soon went almost to pre-crisis level.
"Analysing the Finnish real estate market in the early 1990`s, we see that after three years of falling prices for seven years reached the level marked in a boom period. Thus, the whole cycle lasted for ten years ", - said the head of real estate bureau Uus Maa Mika Suksdorff.
"Based on the experience of neighboring countries, then the recovery in prices would take at least six or seven years, that is ten years since the crisis began," - said a board member of Pindi Kinnisvara Peep Sooman, answering the question about when prices return to pre-crisis level .
Experts, while agreeing that the recovery in prices on the real estate market will take time, several differ in opinions on how quickly this will happen.
Suksdorff not exclude that in Estonia because of its small size, property prices may rise faster than in Finland. "Typically, in Estonia the changes come faster and perhaps the price will return to pre-crisis level in five years, if not a new crisis will happen" - he said.
According to Sooman, recovery in prices, by contrast, require more time, since the real estate market downturn was too harsh. "In essence the question is how fast prices have fallen by 50 per cent rise in half", - said Sooman.
Will the arrival of the euro
Head of Ober-Haus Tarmo Kase believes that prices will never rise to the level observed during the real estate boom. "At least in the next five years, this is not expected" - he said, noting that the upward trend in prices is still observed.
"The developers are pressuring the rising price of construction, and they are forced to raise prices, which, however, does not mean that the property can be sold at higher prices," - he said.
It will take seven and a half years to ensure that prices have risen twice, provided that each year they will increase by 10 percent. For example, if the cost of an apartment, bought during the boom for one million euros, down now twice, then theoretically the end of 2017 with a stable 10 percent annual growth it will cost 974,358 crowns.
In this case, of course, should take into account that for a constant return home loan when the property value equals the loan balance, whichever is earlier.
According Suksdorffa, the euro also speaks in favor of the idea that prices will rise, because, as the experience of other countries, the arrival of the euro has always marks a certain rise in prices. However, Suksdorffa opinion not shared by other specialists.
According to Sooman, the view that with the advent of the euro real estate prices go up, obviously exaggerated. Euro will soon demoralizing effect on the market. Consumers, frightened by the partial unjustified price increases, will not rush to open wallets "- he said.