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At the present time about half of all real estate transactions in Estonia are carried out without financing by a bank, Andres Tukk, head of the division for private finance at Swedbank, said.
Half of real estate transactions in Estonia are made without bank - Swedbank
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"Half the real estate transactions are done without bank," Tukk said at a roundtable hosted by the Estonian Banking Association and BNS on Tuesday. "Historically, we're in a completely unbelievable situation."
Swedbank has kept records on this subject since 2004. "Where in 2007 almost 100 percent of all transactions were carried out with financing by a bank, the ratio now is 50 percent," said Tukk.
"Right now clients' own assets, liquid assets, are involved in the transactions. Due to this we can see speculative activity in new developments today, and banks aren't very strongly involved in it," said Tukk.
"I've heard from developers that where in 2007 one apartment was bought, today people come and buy a whole floor," said Tukk. "While people say different things, it certainly holds true for the Tallinn market and the city center now that the offer of new developments has been scarce and there's been an increase in prices."