OREANDA-NEWS. On April 17, 2008 JANA KASK, Head of the Financial Sector Policy Division of Eesti Pank, gave a presentation at the event "Kinnisvarahommik" organised by Kinnisvaraekspert - Baltic Property Expert (BPE), where she gave an overview of the developments in the Estonian economy and in the real estate sector, reported the press-centre of Eesti Pank.

"Signs of an economic adjustment manifested themselves in the real estate market, just like in the retail trade, credit market and elsewhere, already in the middle of 2007. These changes were anticipated and welcome, and by now, the real estate market activity has reached the pre-boom level," Jana Kask said. She added that Eesti Pank forecasts a 10% decline in investment in 2008, mainly due to the decrease in real estate investments. "Investments play an important role in generating economic growth. According to current forecasts, investments should start to increase again in 2009-2010," Kask said.

"The cooling of the real estate market means that companies having weaker projects may have trouble in refinancing short-term loans. The volume and share of default loans will also increase during the slow growth period," Kask characterised the downside of the current situation. "On the other hand, people's attitudes and expectations have become more reasonable as regards real estate market developments and their personal possibilities. Since income growth has been relatively rapid and the real estate prices have slightly fallen, purchasing housing has become more affordable. Long-term income growth expectations have increased people's requirements to the size and quality of housing," explained Jana Kask.