According to Risto Vähi, an analyst at Uus Maa, Estonia’s largest real estate agency, the current real estate market is clearly a buyers’ market. Increasingly, apartments are being listed for sale at prices lower than before.
Vähi believes that one principle of the stock market also applies to real estate: it’s worth buying when “blood is on the streets.” He said, “Nowadays, it is very clearly a buyers’ market. Sellers are flexible and understand that they cannot get the same price as they did half a year ago, so they are lowering their expectations. More and more second-hand apartments are coming onto the market with a very good price per square meter. It’s a good investment opportunity.”
In the current market situation, you can make pretty bold offers and no one will be offended if you ask for 10 percent off the asking price, for example. Of course, the offer must be reasonable; fishing for bargains will not produce results.
In tough times, more people tend to ‘flip,’ or buy rundown apartments and fix them up. Those who have money to buy now and don’t have to worry about interest rate hikes are in a very favorable position to negotiate and make offers. They can then sell the refurbished apartment at a profit or rent it out.
“I am currently monitoring apartments in Tallinn’s Old Town and city center, where there are very reasonable starting prices. There are many choices for what to do with the property. For example, the return of tourism makes short-term rentals profitable again. There are also some objects among the suburban apartments whose asking prices have dropped by twenty percent and are liquid in any market situation,” Vähi commented.
According to the Uus Maa analyst, it is also worth looking at nearby towns and small cities with good infrastructure for investment purposes. “Due to the lower purchase price, rental returns in smaller places are often better than in Tallinn. It’s also worth considering the future of the area – a new road or better rail connection will certainly affect the market,” Vähi added.
Interestingly, the official sale prices of new developments remain more or less the same, although developers have become more flexible. Discounts on price, parking space, storage, or kitchen are negotiable.