Eesti Pank has published the new issue of Kroon & Economy, where the economists of the central bank analyse
loan and real estate issues in Estonia and Europe. The publication is available at
www.bankofestonia.info.
Raoul Lättemäe and Krista Touart give an overview of the recent developments in the Estonian housing market and compare the structure of the Estonian housing stock to that in other European Union Member States. There is an average of 28 square metres of dwelling area per resident in Estonia. This is somewhat less than in the old EU Member States (about 35-45 square metres), but the indicator slightly exceeds the average of the new Member States. The authors note that dwellings in Estonia are smaller, older and often with poorer technical communications. Moreover, the share of apartment blocks in the housing stock is also higher. .
Jana Kask observes in her article about the household loan growth in European countries that loan growth has been extremely fast in various countries all over the world. Meanwhile, understanding household credit growth trends along with accurate risk estimates contribute to the assessment of corporate, and more generally, macroeconomic risks as well as anticipation of potential problems. .
The new issue also includes an article from the Monthly Bulletin of the European Central Bank about residential property prices in the euro area. The price dynamics have been quite robust in recent years although there are significant differences across countries. Laura Ehrlich notes in her comment that as regards the increase in residential property prices Estonia exceeds notably these euro area countries that stand out for fast price rise anyway. The growth figures of real estate prices in Estonia are most comparable with the figures for 1997-2000 in Ireland, where the average price growth was 21.1 per cent a year. .
The article by Jaak Tõrs focuses on the issues related to the European Union framework for deposit guarantee. According to the EU Directive on deposit guarantee schemes, every Member State must have a deposit guarantee scheme in place. However, it has not been harmonised whether all deposits must be guaranteed or just those of small depositors. This and other issues related to deposit insurance are covered in that article. The background information describes the financial system safety net as the system of security measures for minimising systemic risk. .
The appendix includes the main quarterly indicators of the Estonian economy as at 31 August 2006. .
