REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN ESTONIA: A SURVEY ANALYSIS - PowerPoint PPT Presentation

Loading...

PPT – REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN ESTONIA: A SURVEY ANALYSIS PowerPoint presentation | free to download - id: 4287ef-Yjg2N



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN ESTONIA: A SURVEY ANALYSIS

Description:

REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN ESTONIA: A SURVEY ANALYSIS Kaia Kask School of Economics and Business Administration University of Tartu – PowerPoint PPT presentation

Number of Views:142
Avg rating:3.0/5.0
Slides: 21
Provided by: eresScix
Learn more at: http://eres.scix.net
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN ESTONIA: A SURVEY ANALYSIS


1
REAL ESTATE INVESTMENT MARKET PERSPECTIVES IN
ESTONIA A SURVEY ANALYSIS
  • Kaia Kask
  • School of Economics and Business Administration
  • University of Tartu
  • Ene Kolbre
  • School of Economics and Business Administration
  • Tallinn University of Technology

2
Problem
  • Changes in the economy have directly influenced
    the development of the real estate market.
  • The research question Is the Estonian investment
    market environment more unfavourable than
    favourable for potential real estate investors ?

2
2
3
The Total Number and Volume of transactions in
Estonian Real Estate Market
Million EEK
Number
Value of transactions
Number of transactions
3
4
Main Reasons of the Real Estate Market Fall
  • Economic state
  • High interest rates
  • Rigorous loan conditions
  • Rising unemployment
  • Real wage decline

4
5
Economic Indicators during 2002-2008 and 2009
forecast
2003 2004 2005 2006 2007 2008 2009
Real GDP growth () 7.1 7.5 9.2 10.4 6.3 -3.6 -12,3
Real private consumption growth () 9.6 6.7 10.6 15.1 7.8 -4.0 -9.5
Unemployment rate () 10.0 9.7 7.9 5.9 4.7 5.5 12.8
Real wage growth () 8.0 5.2 6.1 11.2 11.6 3.3 -4.7
Nominal credit growth () 38.4 33.8 35.6 51.6 30.2 7.3 -7.5
Source Bank of Estonia
5
6
Notarised Purchase-Sale Contracts of Registered
Immovables with Residential Buildings and
Ownership of Dwellings
Number of transactions
Value of contracts (mln EEK)
Total number of transactions
Purchase-sale contracts of dwellings
Value of contracts
6
7
Average Purchase-Sale Prices per Square Metre of
a 2-room Apartment and number of transactions in
Tallinn
EEK/sqm
Average price
Number of transactions
7
8
Indicator to evaluate price developments over a
longer period of time
  • price-to-income ratio (P/I)
  • the share of the average (median) price of an
    apartment/house in the average (median) total
    annual net household income, measured in real
    values and adjusted for inflation

8
8
9
P/I ratio of the Tallinn and Tartu housing market
(2- and 3-room apartments)
9
9
10
Tobins q
  • Tobins q investment theory has often been used
    to analyse supply and to model long-term changes
    in housing market and to assess real estate
  • The following relationship has been used to find
    Tobins q
  • q V/ C,
  • where
  • V market value of housing
  • C housing replacement costs

10
10
11
Tobins q of the Estonian and Tallinn apartment
market
11
12
Survey analysis
  • Questionnaire conducted in June 2009
  • A pilot study with a sample of 8 real estate
    market experts
  • Responce rate 100
  • Questionnaire contained
  • 6 general questions about real estate investment
    market situation and perspectives
  • 2 questions about the prognosis of vacancy and
    cap rates for the nearest 6 and 12 months

12
13
Answers to general questions about real estate
market
  • Estimation of Estonian real estate market
    transparency 2.75 (the scale from 1 till 5)
  • Estimation of current state of Estonian
    investment market envioronment for foreign
    investors 3.25 (the scale from 1 till 5)
  • Estimation about perspectives of investment
    environment of Baltic real estate markets
    (the scale from 1 till 10)
  • Estonia 5.38
  • Lithuania 5.13
  • Latvia 3.63

14
Real estate investment perspectives by market
sectors in Estonia (the scale from 1 till 10)
15
Real estate development perspectives by market
sectors in Estonia (the scale from 1 till 10)
16
Forecast of the trends in market cap rates by
spaces ()
17
Forecast of the trends in market vacancy rates by
spaces ()
18
The stages of real estate market development
booms in Estonia so far
  • Privatization of land
  • ?
  • Development of office spaces
  • ?
  • Development of shopping spaces
  • ?
  • Development of housing spaces
  • ?
  • Development of storage and production spaces
  • ?
  • Development of office spaces
  • ?
  • Development of shopping spaces?

19
Conclusions
  • Over the last two years, rates of return have
    risen in all market sectors
  • Within the next year or two, in Tallinn or in its
    close vicinity no new major projects are expected
    to be launched
  • The bottom of the real estate market is feared to
    arrive early in the 2010, the shape of this
    bottom is expected to be flat
  • The transparency of Estonian real estate market
    is still in a range of semi transparency with a
    slight backward movement towards opacity
  • The most perspective real estate market sector
    for investment in the nearest 1-2 years indicated
    by experts, was shopping space market
  • The most perspective real estate market sector
    for development during the nearest 1-2 years
    indicated by experts, was housing space for
    selling.

20
Thank You for Attention!
About PowerShow.com