Why a Strong Euro is Good for Estonia’s Real Estate Market

There are many factors which affect the Estonian real estate market, from the number of properties available to the demand for them. An important element is also the value of the euro, as it provides plenty of buying power for those in the market for a new home, as well as affecting the prices of property.

Real Estate News, Estonia

While a strong euro would be expected to push house prices up, it is also good for those looking to buy or rent in the real estate market. It can also be beneficial for IG forex traders, with the currency and real estate markets closely linked. Here’s why a strong euro will benefit both.  

Estonian Real Estate Market

The Estonian real estate market experienced something of a bubble after the global financial crash of 2008. It possessed some of the fastest rising house prices in the whole of Europe, with residential prices increasing by a massive 12.6% in 2014 alone. This was down to factors including more young families looking to buy and banks providing accessible loans.

In the past couple of years, house price changes have fallen somewhat, though in Q4 of 2016 they were still up 7.36% year-on-year in Tallin. Such a rise does sound like bad news on paper, increasing costs making some properties unaffordable, yet it’s not been all bad.   

Benefits for Buyers

A stronger euro as a result of the Brexit vote has increased purchasing power for many house hunters in Estonia. While prices have gone up, a stronger euro has improved the sense of security for many buyers, believing that investing in property is worth doing at a time when both the currency and prices are strong, rather than waiting for one, if not both, to drop. If anything, a strong euro has helped to counteract the rising house prices in Estonia, which some feared would put off buyers and result in a market crash.  

Attractive Rental Opportunities

The strength of the euro has also boosted the rental sector. Rental prices in Estonia have also seen a rise, but not as steep as that of house prices for property for sale. A strengthened euro has therefore been even more beneficial for those looking to rent in the country. 

Apartments, houses, commercial property and more are all available to rent in the country at City24. Renting in Estonia looks set to have a positive future, for both renters and landlords, if the euro can maintain its current value.

Euro Performance Predictions

Should the euro drop significantly in value then there could be repercussions for the Estonian real estate market. The upcoming French and later German elections are bound to introduce some uncertainty, seeing the currency dip, but depending on the results, this could only be temporary. The same is true for the ongoing Brexit negotiations and any other elections across the Eurozone, which will impact upon the currency.

A strong euro is good for those looking to rent or buy in Estonia’s real estate market, though if house prices continue to rise at a rapid rate or the currency level falls hugely, there could be problems up ahead.  

Think of selling a property? Choose Baltic Sotheby’s International Realty!

06.02.2017

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Baltic Sotheby’s International Realty opened a new office in the Old Town of Tallinn

05.07.2017

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