TALLINN - A survey of new residential apartment projects in the Baltic capitals has shown that there are still many differences in the dynamic development of the three cities.
Kadri Lindpere, head of communications of Arco Vara Group, said that while the number of new apartment houses built in suburban Vilnius and Tallinn in recent years is roughly the same, the number of new housing developments in Riga is almost half lower than in Tallinn.
In Tallinn and its surroundings, 80 new apartment houses have been developed in recent years, including around 30 new housing estates.
In Riga only 34 new apartment houses have been developed, and there are 18 new housing estates. If anything, this shows that the potential of Riga's housing market is still not fully realized.
Vilnius developed 2,208 new apartments last year, which is comparable with Estonia. There are 12 new housing estates in the Lithuania capital, with approximately 15 properties on average in each.
Unlike in Tallinn, the new apartment buildings of Riga and Vilnius are mainly located in the suburbs, and there are a number of projects being developed at the same time.
Speaking of potential, the biggest seems to be Lithuania, which has at present 14 square meters per resident and where prices are higher than in Estonia or Latvia.
Lindpere said that although the Estonian real estate market was small, it was still ahead of its Baltic neighbors. However, the slowdown of the Estonian economy and its higher real estate prices signify that Latvia and Lithuania are catching up fast.
The differences in prices in the Baltic countries are also likely to start disappearing since more foreign investors will look at the Baltic region as one market.
Two other important factors in the development of the local real estate market are loans and purchasing power. Statistically, average housing loan interest is 5.9 percent in Estonia, 6.5 percent in Latvia and 5.5 percent in Lithuania.