The Marketing Manager of leading Baltic realtor, Ober-Haus, disputes a recent report from Danske Bank predicting the imminent collapse of property prices in the Baltic States.

Andris Dovieks, marketing manager at Ober-Haus, the largest real estate agency in the Baltics, said that the report “looks like a commentary from far away.”

“It’s true that prices are not growing and have fallen a little bit, but this is a correction,” he said, adding that overall property prices may fall 5 percent.

Looking ahead to the end of the year, Dovieks said that stabilization will come in October, which Ober-Haus agents are referring to as “a milestone” for the property market.

As he explained, consumers have become more discriminating in the past year and are pickier about the property they choose. Newly built residences are in, and older Soviet-era apartments are out, Dovieks said.

“There won’t be a crash – there may be another 2 - 3 percent fall in prices, but we say this is a correction after a period of large growth,” he said.

Prices for the hot commodity in the industry – new apartments – have stopped growing not because of a drop in demand but because of finance: banks have become stricter in processing loans.

Still, the specter of a major correction looms over the market. A Postimees headline on Aug. 14 boldly announced that Tallinn apartments have become 10 percent cheaper.

The paper quoted Pindi Kinnisvara as saying that supply has doubled over the year and the situation now resembles a buyers’ market. Other sources say Estonian banks have also become stricter in handing out loans and the loans themselves are more expensive.