OREANDA-NEWS. July 14, 2014. According to an SEB survey, Estonians take loans to buy a home for their family, and not for investment.

The responsibilities related to acquiring property are outweighed by the better reputation and trustworthiness of a property owner.

SEB surveyed the motives underlying the decision to buy a new home for customers who took out a home loan in the period after the economic crisis, and their attitudes towards real estate as an investment.  It transpired that 35 per cent of borrowers moved to a new home from rented housing, 27 per cent of respondents were not happy with their previous dwellings that did not meet the needs of the family, and one-fifth had just started independent life. Just six per cent of those who participated in the survey purchased new dwellings in order to invest in property.

Borrowers share the view that property is a good investment (this statement was on average graded with 4.25 out of 5 points) and in most cases property prices are expected to rise (average grade 3.9). At the same time people are aware that owning property means obligations and responsibilities (average grade 4.11), which is more important than the trustworthiness and good reputation of a property owner (grade 3.5).

Although the respondents had chosen to purchase a home, they disagree when it comes to the statement that the rental market is less trustworthy and transparent than the market of purchase and sale. This statement received 3.5 points on a scale of 5; respondents with a higher education believed that renting dwellings makes sense while customers with basic education had less faith.

Triin Messimas, Development Manager of Private Loans at SEB: “Estonian families mainly borrow to purchase a home. Although in most cases today property prices are expected to increase and real estate is normally considered a good investment, it is not the main driver behind buying dwellings.  Generally purchase of a home is not planned for a certain period and as one advances in age, there is more wish to purchase property for life. Most home buyers with a basic education believe that ownership of property involves new obligations and responsibilities, and at the same time they also rely more on the trustworthiness and better reputation of a property owner.”

*The survey was conducted in the period between 3 March and 4 April. The sample consisted of clients who had taken a home loan from SEB between 2011 and the present. There were 1,343 respondents to the survey.