Even though times are difficult, the interest in luxurious and exclusive real estate is still high. It is a property class with steadily increasing value which also better survives the low periods of the economy.
As a person who appreciates good architecture and is active on the real estate market, I am glad to admit that the Estonian people have started to appreciate a high-quality, aesthetic living environment that is also architecturally well planned.
For me, good architecture suits its environment. If we speak of houses, great architecture reflects the surrounding environment so that the two blend into each other, become intertwined. Just as a building should be in harmony with its environment, the people living in the building should feel it, too.
In the real estate world, such houses and apartments are called premium-class real estate.
Market is stabilizing, demand remains
The real estate market that was hot in spring and summer shows signs of maturity as the autumn arrives. The market is characterized by an increased number of offers, whereas the demand is still comparable to the one of last year and the first half of this year. We are moving into the phase where the market will calm down, where the schizophrenic times of fast decision-making and fear of missing out will be left behind, and the buyers and tenants can take their time, choose, and thus make wiser and better considered decisions.
When we look at numbers, the transaction volumes in the segment of higher-end real estate are as follows:
Transactions with houses in Tallinn and Harju County (priced €750,000+):
2019 – 9,
2020 – 7,
2021 – 32,
2022 (1st half of the year) – 18.
Apartment transactions in Tallinn and Harju County (priced €500,000+):
2019 – 31,
2020 – 35,
2021 – 73,
2022 (1st half of the year) – 85.
Buyers and tenants show much greater awareness regarding their wishes and are ready to pay the price if it is justified.
People buy comfort and top quality
The buyers are mostly people living permanently in Estonia who want a home meeting all their needs and those of their family. Important aspects include the location, design and layout, privacy, sufficient space for all family members, high building quality with proper documentation, and high-quality well-planned interior architecture. Modern and sustainable utility solutions are becoming more and more important, especially now.
If years ago, houses ‘built to sell’ had a somewhat negative reputation, now there are houses on the market that have been built for that purpose, but have very good locations, good designs, and high building quality. Interest is equally big both in houses that are completed and furnished and in houses where the interior design can be created fully to one’s own taste.
As for apartments, there is demand for larger, penthouse-type residential premises. Naturally, also here the characteristics valued most are privacy, unique views offered by the top floors of high-rise buildings, good layout, and conveniences in the form of parking in garage and additional storage rooms. For apartments, also modern and sustainable utility solutions are important.
People look for full solutions on the rental market
A potential tenant has a slightly different profile than a potential buyer. Currently, people looking for high-quality real estate are foreign talents who have come to work for Estonian IT companies, employees of embassies and our own local customers who have either sold their existing property and are looking for a new home or are in the process of building it.
As a rental apartment is still a temporary solution and may not be very convenient for families, people want to make this period as nice as possible and are also ready to pay more for that. Most of the customers look for fully furnished rental premises with everything necessary for convenient life, starting from kitchen utensils to interior design elements.
The offering for high-quality rental apartments is currently rather good, but rather limited for rental houses and house shares.
Very few houses are built for the purpose of rental. Homes are usually let when the owners plan to move abroad from Estonia but return at some point. However, it may happen that people do not want to have pets in their houses or have other wishes that may not match the expectations of potential tenants. Still, it may be said that also in that market segment we are moving in the direction where the number of offers increases and owners understand that the risks associated with rental can be managed by various insurances and guarantee deposits.
The number of offers and potential buyers is increasing
Thus, it can safely be said that the demand for both purchase and rental properties on the premium-class real estate market is still in the growth phase. Customers are informed and demanding, the number of offers is increasing, and people are ready to pay the justified price for the right and suitable house, apartment, or plot.
The number of offers in this real estate segment increases year after year, and there are more and more customers who appreciate high-quality real estate.
LUXUM is dedicated to the sale of the most exclusive and unique real estate in Estonia. Our 30-year experience, real estate agents specializing in premium-class real estate, extensive contact network and latest market intelligence enable our customers to find a suitable buyer or tenant for their real estate or find a home of their dreams.
Lii Salusaar (Real Estate Agent at Uus Maa Luxum)