Housing Market in Estonia

From the IMF’s latest report on Estonia:

“The authorities estimate that the housing market was moderately overvalued in 2021, while house price growth accelerated further in early 2022, reflecting a combination of strong demand and limited supply. In March 2022, the government tightened the eligibility criteria of the housing loan support program to better target support. The central bank has announced an increase in the countercyclical capital buffer, moving it from zero to 1 percent effective in December 2022.


The macroprudential stance is appropriate, but careful monitoring of housing market developments is needed. The new countercyclical buffer framework, which will take effect in December 2022, entails a tighter effective stance. This appears appropriate given the continued upward momentum in house prices and credit, which was sustained even during the early phase of the war in Ukraine. The case for further macroprudential action should be continually re-assessed in line with cyclical and housing market conditions, which would depend on the evolution and impact of the war in Ukraine and for now is subject to large uncertainty. The monitoring of the housing market and related lending should pay particular attention to riskier loans such as those with debt-service-to-income ratios close to the regulatory limit. The government’s recent tightening of the eligibility criteria of the housing loan support program in March 2022 is a welcome step.”

Posted by at 12:00 PM

Labels: Global Housing Watch


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