Real estate in brief

A review of Lithuania's real estate market released by Kofod-Jensen & Bach-Nielsen, a consultancy firm, finds that the value of real estate in Lithuania has grown by 20 percent over the last three years while profit margins have dropped by 10.5 percent.

Hans Urban, the company's general director for the Baltics, predicted that market growth would push the margins further down to 10 percent.

Though the average floor space per resident in Latvia is 21 square meters - in comparison with the EU where it is 42 square meters - experts do not expect that accession to the European Union will bring an immediate change to the property market. Viktors Savins, chairman of the council of Arco Real Estate, has said that prices will not go up fast after Latvia joins the EU.

Mortgage insurer Busto Paskolu Draudimas said that the housing loan market will continue booming in Lithuania this year and that mortgage borrowing will increase by about 50 percent, or 900 million litas (260 million euros), this year. On January 1 the aggregate mortgage loan portfolio of Lithuanian banks stood at 1.8 billion litas, up 81 percent over the year, according to the Verslo Zinios newspaper.

The Aripaev daily reported that Hansabank, Estonia's largest banking group, has lost market share to smaller competitors. According to the newspaper, Hansabank's market share in loans has fallen more than 2 percent to settle at 50 percent. This decline is valued at approximately 1.5 billion kroons (96 million euros). Nordea bank, meanwhile, has increased its loan portfolio 58 percent and reported that its market share in the housing loan market has reached 12 percent.

The forecasted global increase in steel prices by 20-30 percent might raise building costs in Latvia by 5-15 percent, the Dienas Bizness daily reported on March 29. Ainars Paunins, commercial director of the Re&Re construction company stated that steel materials typically make up about 10-15 percent of building price tags. The publication also wrote that the amount of construction in Latvia has reached 524.7 million lats, up 14.1 percent from the previous year.

Lithuania's leading construction companies anticipate growth in 2004, according to local news sources. The Panevezio Statybos Trestas construction company projects 150 million litas in sales this year, a 10 percent increase upon 2003. Another construction group, YIT Kausta, reported 120.6 million litas in sales last year - down 15.3 percent from 2002. But the group's housing construction subsidiary YIT Kausta Bustas plans to increase annual sales by 16 percent this year, up about 140 million litas.

More limits than just the sky in Tartu