TALLINN - Dozens of new residential buildings being completed in Tallinn and surrounding areas still have many unsold apartments, Estonian media reported last week.
In some buildings due to be completed in the near future, some 80-90 percent of the apartments remain unsold, the Aripaev business daily reported. Difficulties are being experienced by about 30 apartment house developments in the capital, which include projects of well-known developers, the paper said.
"If before apartments found a new owner before the developer even put the shovel into the ground, now even a good location, a developer's good reputation and quality construction do not secure 100 percent sales success," the report said.
Time was working against many developers who had taken out large loans to finance their projects, the report stated.
Figures by the Bank of Estonia show that the volume of new housing loans has decreased. Sellers are now trying to learn how to find the last families eligible for a mortgage loan to locate potential buyers, the paper said.
The manager of the Uus Maa real estate company, Jaanus Laugus, said that the situation still wasn't as bad as in 1997, when there weren't any deals at all.
Still, despite the lull on the demand side, developers continue to be optimistic and are unwilling to lower prices. Three thousand unsold apartments is not that big a number, Laugus added.
"I wonder what will become of the small developers," Laugus said. "Merko, YIT, Koger & Partnerid 's they have room to let prices lower too."
According to the Estonian Statistical Office, 1,440 new dwellings were permitted to be put into use in the first quarter of this year, 29 percent more than in the same period last year.
In comparison with the final quarter of last year the number of dwellings in new buildings permitted to be put into use decreased by 255.
The average size of the dwellings permitted into use in Q1 increased by 10 percent year on year to 84.6 square meters.
Building permits were issued to 2,739 new dwellings in Q1 this year, 27 percent more than in the same period last year but nearly 12 percent less than in the final quarter of 2007.
In Q1 this year 273 non-residential buildings received permits for putting into use, whereas last year in the same period more than double that number of non-residential buildings were cleared for use.