Mortgage crisis is not far off
The crisis in mortgages for the first time spoke of the former Soviet Union. After many years the prices for housing in the Baltic countries, they collapsed. Analysts from Lithuania, Latvia and Estonia believe that the same may soon have to wait and in Kiev.
The cost of housing has grown in the Baltic countries from 2004 to 2006, as rapidly as we have in Ukraine. This process have contributed to the banks that were engaged in granting mortgage loans to low-cost, well, well warmed and speculators market. Second buy housing at the initial stage of construction, and after already resold it after putting the house in operation. All of these factors are pushing up the prices up every month at 5% and higher, until, until prices reached a level where to buy housing was very much expensive.
In 2007, it became clear that this cost to buy housing is simply unwise, experts say. They shared with us that over the last year in Estonia, housing prices have fallen by 15%, Latvia - 5%. In addition, the banks have focused on the tightening of lending. Cost of 1 sq. km. m second home in the Baltic countries is EUR1, 4 thousand
These figures could still be called the correlation of the market, until such time as the January 7 Estonia's largest construction company «YIT Ehitus» does not lower the price offered for sale of apartments at 27%. But that was not enough, and January 17 the price dropped again. In general, the cost of housing in Estonia fell today to 31%.
Latvian builders strongly entice potential buyers. Everywhere could be heard the slogans: "Buy a flat and get a free plasma TV", "Buy a house, and we'll give you a car!". But all their efforts are futile - the inhabitants of the Baltic states are unwilling to purchase highly expensive housing and wait until prices fall further. Who will buy your property, if everywhere assert that prices could drop her? "Wait for the acquisition of housing can be a year, and during this time she had dropped in price. It is understood 100% of potential buyers, it is because today no one buys house "- so they say real estate experts in the Baltic countries.
Analysts suggest that, after a brief lull, the recession will continue: another investment boom in Estonia is not expected, so there is absolutely no prerequisites for the development of the housing market. Finnish, Danish and Swedish investors their money is invested not in production, but in housing, which resulted in a construction boom. Erected as homes that simply do not have enough people in Estonia. Nobody gets home.
Development of the situation in Lithuania, Latvia and Estonia to the pain like a real-estate market in Ukraine. Only in 2006, the cost of housing in the capital rose by 60%. However, in 2007, despite assurances by contractors and experts, the prices have stopped growing so rapidly, and the increase was only 12%, which is even below the inflation rate in the country.
Just as in the Baltic countries, Ukraine is still a significant part of the speculators who make money on the resale of homes. Similarly, as in Latvia, the owners of construction companies have never recognized the fact that the cost of housing can be reduced.
Experts believe that when there is a first price increase, and after the next recession - it is quite normal business cycle, and it works absolutely everywhere, in all economies. Here in Latvia all have only seen growth in property values, and no one wanted to believe that then follow recession. Because in the near future, a very similar situation with a decrease in the cost of housing can be seen in the capital of Ukraine. If the expert will assure you that real estate prices in Kiev will never go down, you know, he just lied to you. Any reasonable judge should assume even 1%, it will happen this year, well may be next. But what it does, that's for sure.
The crisis in mortgages for the first time spoke of the former Soviet Union. After many years the prices for housing in the Baltic countries, they collapsed. Analysts from Lithuania, Latvia and Estonia believe that the same may soon have to wait and in Kiev.
The cost of housing has grown in the Baltic countries from 2004 to 2006, as rapidly as we have in Ukraine. This process have contributed to the banks that were engaged in granting mortgage loans to low-cost, well, well warmed and speculators market. Second buy housing at the initial stage of construction, and after already resold it after putting the house in operation. All of these factors are pushing up the prices up every month at 5% and higher, until, until prices reached a level where to buy housing was very much expensive.
In 2007, it became clear that this cost to buy housing is simply unwise, experts say. They shared with us that over the last year in Estonia, housing prices have fallen by 15%, Latvia - 5%. In addition, the banks have focused on the tightening of lending. Cost of 1 sq. km. m second home in the Baltic countries is EUR1, 4 thousand
These figures could still be called the correlation of the market, until such time as the January 7 Estonia's largest construction company «YIT Ehitus» does not lower the price offered for sale of apartments at 27%. But that was not enough, and January 17 the price dropped again. In general, the cost of housing in Estonia fell today to 31%.
Latvian builders strongly entice potential buyers. Everywhere could be heard the slogans: "Buy a flat and get a free plasma TV", "Buy a house, and we'll give you a car!". But all their efforts are futile - the inhabitants of the Baltic states are unwilling to purchase highly expensive housing and wait until prices fall further. Who will buy your property, if everywhere assert that prices could drop her? "Wait for the acquisition of housing can be a year, and during this time she had dropped in price. It is understood 100% of potential buyers, it is because today no one buys house "- so they say real estate experts in the Baltic countries.
Analysts suggest that, after a brief lull, the recession will continue: another investment boom in Estonia is not expected, so there is absolutely no prerequisites for the development of the housing market. Finnish, Danish and Swedish investors their money is invested not in production, but in housing, which resulted in a construction boom. Erected as homes that simply do not have enough people in Estonia. Nobody gets home.
Development of the situation in Lithuania, Latvia and Estonia to the pain like a real-estate market in Ukraine. Only in 2006, the cost of housing in the capital rose by 60%. However, in 2007, despite assurances by contractors and experts, the prices have stopped growing so rapidly, and the increase was only 12%, which is even below the inflation rate in the country.
Just as in the Baltic countries, Ukraine is still a significant part of the speculators who make money on the resale of homes. Similarly, as in Latvia, the owners of construction companies have never recognized the fact that the cost of housing can be reduced.
Experts believe that when there is a first price increase, and after the next recession - it is quite normal business cycle, and it works absolutely everywhere, in all economies. Here in Latvia all have only seen growth in property values, and no one wanted to believe that then follow recession. Because in the near future, a very similar situation with a decrease in the cost of housing can be seen in the capital of Ukraine. If the expert will assure you that real estate prices in Kiev will never go down, you know, he just lied to you. Any reasonable judge should assume even 1%, it will happen this year, well may be next. But what it does, that's for sure.
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