Swedish banks on land-buying spree

Many Baltic landowners found themselves in a catch-22 as their income decreased and land value halved while their mortgage payment remained tied to the higher value, typically with a loan taken out in euros. Photo by Nathan Greenhalgh/Baltic Reports

TALLINN — Both SEB and Swedbank have dedicated billions of krooni for buying real estate in the Baltic states after the crisis reduced prices by as much as two-thirds in some regions and the crisis made many homeowners unable to pay their mortgage.

If everything goes as planned then Swedbank’s subsidiary Ektornet Residential Estonia will have 5 billion krooni (€319.5 million) worth of real estate in the Baltics by the end of the year. Most of the acquisitions are coming through bankruptcy processes with former homeowners unable to pay their mortgage as opposed to purchases from private parties.

Meelis Shokman, CEO of Ektornet Residential Estonia told Äripäev that the company is participating in auctions that take place during the process of enforcing bankruptcy.

Compared to last year, the banks’ estates have grown by 45.4 milion krooni (€2.9 million), and the company has total of 290 million krooni (€18.5 million) worth of properties in the Baltics.

“These are basically housing development projects,” said Shokman. “The current year is busy for us and we actively take part in the auctions.”

SEB’s land reacquisition subsidiary Ectectus is also keeping an eye on the situation, and has already won three auctions worth 60 million krooni (€3.8 million) within the last two weeks.

Hannes Kuhlbach, CEO of Estectus told Äripäev that there are many properties in foreclosure sales, and the bank is planning to take part in each auction.

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1 Response for “Swedish banks on land-buying spree”

  1. Ossi says:

    Well done Eestipojat! Now when russians are out, you are giving your land to the swedes. Debt free country 20 yrs ago, now bankrupt. Work hard so that you can take more loans. And give the banks nice capital gains for doing nothing.

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