Transparency of Real Estate Market in Estonia

Abstract

Time after time, at least since 2001, there has been a lot of discussion about the real estate market failure in Estonia, where all kinds of analysts have been trying to predict a bubble, bursting quite soon. Although this kind of discussion is not new, it is obvious by now, that the situation in real estate market is a little bit changed compared to some previous years. Rapid growth in prices in real estate market during the last six years may not hold in conditions, where interest rates are increasing and the capital inflow to the market is falling. In such conditions it is not surprising that market players have started to turn the attention to other alternative ways in order to maintain and improve the gained position among investors in real estate market. One of these ways could be to improve the transparency of national real estate market. The aim of the paper is to identify, what determines the transparency of a market in real estate sector in Estonia. To achieve the aim, the following research tasks have been set up: 1) to define the concept of transparency; 2) to describe and compare the elements and criteria of transparency of different institutions (transparency on governmental, banking and corporate level); 3) to identify and explain the dimensions of transparency; 4) to find out the ways of measurement of real estate market transparency; 5) to draw conclusions for real estate market transparency in Estonia.