The real estate market returned to its normal state and the large decline that occurred at the beginning of the year in Tallinn was overcome. The market is currently favorable for buyers, who are showing more interest in new homes. However, the market also faces challenges such as increasing interest rates and an economic downturn, making it difficult for some buyers to cope.
Despite the slight positivity, we cannot ignore the increasing interest rates and economic downturn. Loans are becoming more expensive and those who are high earners and have their own financing are better able to cope in the real estate market.
Despite the market picking up, transaction numbers remain lower compared to last year’s figures and the price level becomes more volatile, depending on the proportion of new apartments. Annual price increases are slowly starting to slow down because last year’s high comparison base is having an increasing impact, and soon we will see declines instead of increases.
Therefore, the buyers’ market continues and for sellers to achieve a faster sales pace, they should be willing to compromise. Although a storm of interest may still be seen for some very special and good-priced properties, most offers will not be as fortunate.
In Tallinn, 617 apartments were sold in February (457 in January). As expected, the apartment market climbed out of its silence at the beginning of the year and more contracts were signed and more properties were viewed in February. The median price per square meter was 2774 euros, which is 5.1% higher than January and 8.4% higher than February of last year.
However, the number of transactions in Tartu decreased and 83 apartments changed ownership in February (126 in January), with a median price per square meter of 2605 euros. Compared to January, the price level increased by 10.9% and by 33% over the year. Here and in the future, it is clear that the smaller annual growth, which has already been confirmed in the capital, has not yet reached other cities.
In Pärnu, 101 apartments changed ownership in February (74 in January), with a median price per square meter of 2055 euros. While the price level decreased by 1.9% compared to January, it still increased by 23.4% over the year.
In the border town of Narva, 48 apartments were sold in February (46 in January), with a median price per square meter of 550 euros. While the price increased by 7% in the month, it increased by 26.4% over the year.