The Tallinn market is a sentiment indicator for the Estonian real estate market; while some other major cities have seen setbacks, the capital’s market has been steadily climbing since the second half of last year.
In Estonia, a total of 1510 apartment sales transactions were concluded in February, according to preliminary data. This marks the lowest figure since July of the previous year, but it is still slightly higher compared to the same period last year. The median transaction price remains consistent within the range it has been for the past two years, with a median price of 2137 €/m² in February.
Compared to the first two months of last year, the number of transactions has increased by 11%, the median price by 7%, and the total sales volume by 23%. The Estonian real estate market continues to resemble a patchwork quilt—while the market in Tallinn and its surrounding areas is experiencing an upward trend, the further one moves away from the capital, the fewer changes are visible. The tax increases at the beginning of the year are most affecting households with lower incomes, who predominantly live outside Tallinn’s influence. Therefore, it is unlikely that we will see positive impacts on local markets in these areas before the second half of the year.
Estonian Apartment Market
The Tallinn market sets the tone for the sentiment of the entire Estonian real estate market. While we have seen some setbacks in other major cities, the capital’s market has been steadily progressing along an upward trajectory since the second half of last year. In February, approximately 700 transactions were concluded, which is 14% more than last year and almost the same as January. In the secondary market, nearly 600 transactions were concluded, while new developments saw 166 sales, a figure just below December’s results. Compared to the first two months of last year, the secondary market saw a 10% increase in transactions, while sales in new developments rose by 58%. This last result was achieved from a low comparison base, but a 20–30% growth in the new development market no longer seems far-fetched. The median transaction price in February was 2 782 €/m². Based on the first two months of the year, the number of transactions has increased by 21%, while the median price has statistically decreased by almost 4%.
In Tartu, preliminary data shows only 93 transactions in February, marking the lowest figure since January of last year and a decline of 23 transactions compared to the same period last year. While sales in new developments remained stable (35 sales), the secondary market saw fewer than 70 transactions. The average for the past six months has been slightly over 120 secondary market transactions. It is still too early to say whether this decrease is due to the tax increases. The median transaction price has remained stable, with a value of 2 245 €/m² in February, reflecting a 3% increase compared to the same period last year. Thanks to a strong result in January, the number of transactions also shows a notable positive trend (nearly 15%) in comparison with last year.
Pärnu’s results for the first two months of the year have been expectedly positive, although data for 2023 remains unavailable. Based on the first two months of the year, the number of transactions has increased by 67%, and the median price has risen by 7%. In February, 55 transactions were concluded, almost 20 more than a year ago, and surpassing January’s 42 transactions. The median transaction price has remained relatively stable, similar to the rest of Estonia, at 1 839 €/m² in February.
While most of the real estate market is in the positive, Narva continues to experience a deep freeze. Only 47 transactions were concluded in February, marking the lowest result since February 2023. The significant increase in district heating prices, which have more than tripled in the past two years, has placed additional pressure on the market. Consequently, it’s no surprise that the median transaction price has dropped by 12% compared to the same time last year. In February, the median transaction price stood at 449 €/m², 20% lower than last year. The number of transactions has fallen by nearly 2% compared to the first two months of last year.