14-Year Real Estate Boom Winner is North Tallinn

The 2008 financial crisis reached its lowest point in the real estate market in the first quarter of 2009, when the number of transactions fell to levels that had not been seen in this region for many years. After that, a long recovery period began, which the more daring eventually started calling a real estate party. Which regions' residents have emerged from these growth years as the biggest winners? The low point in the number of transactions in the first quarter of 2009 meant 2068 apartment ownership transactions across Estonia. In the first quarter of this year, 4625 transactions were carried out across Estonia, which is why drawing parallels to the crisis back then is emotionally understandable, but at least so far has been numerically unjustified. The number of transactions is an indicator of real estate market health, and today we are still very far from historical low points. However, it is interesting to look at what changes apartment prices in Tallinn have undergone during this 14-year period, where the volume of transactions is sufficient for drawing conclusions and comparing periods.

In the first quarter of 2009, the highest price per square meter was expectedly in the Old Town district, followed closely by Pirita and then Haabersti. In the first quarter of 2023, the picture has changed significantly and North Tallinn has become the most expensive district:

District	Average price 2009 (€/m2)	District	Average price 2023 (€/m2)
Old Town district	1 358	North Tallinn district	3 451
Pirita district	1 269	Old Town district	3 427
Haabersti district	1 076	Kristiine district	3 017
Mustamäe district	942	Pirita district	2 803
Kristiine district	928	Haabersti district	2 778
North Tallinn district	871	Mustamäe district	2 573
Nõmme district	818	Lasnamäe district	2 386
Lasnamäe district	795	Nõmme district	2 313

 

So the clear winner of the 14-year growth cycle is North Tallinn district. Back then, in the first quarter of 2009, 150 North Tallinn apartment ownerships changed hands. Anyone who dared to buy and hold their property until this year deserves congratulations – their property value has grown nearly 300%. The growth in importance and value of North Tallinn in the Estonian real estate market is a beautiful success story, where a comparison to a fairy tale is entirely appropriate, in which an ugly duckling becomes a swan. Given the scale of developments, ongoing plans, and a still excellent location, this success story can only be expected to continue.

Over 200% growth was also shown by Kristiine and Lasnamäe districts, leaving Pirita last, which was at a high price in 2009 and where achieving large growth is proportionally more problematic. In addition, Pirita is a district where there is low supply and, compared to other districts, also incomparably the fewest transactions, which is why few transactions (only about 10 per month at the beginning of the year) have a large share in shaping the average price.

District	Price per square meter increase 2009 > 2023
North Tallinn district	296 %
Kristiine district	225 %
Lasnamäe district	200 %
Nõmme district	183 %
Mustamäe district	173 %
Haabersti district	158 %
Old Town district	152 %
Pirita district	121 %

 

Decent property value growth has been experienced throughout Estonia. Estonia's largest attraction centers, Tartu and Pärnu, can also note facts about high price levels and large growth percentages, to the delight of existing apartment owners and to the dismay of new apartment buyers. The price per square meter of apartments in Tartu has grown 211% over the 14-year period and apartments in Pärnu have increased 187%.

Although the commonly accepted saying goes that buying a home is not an investment, nevertheless it can be stated that in addition to the home warmth and sense of happiness experienced over the 14 years, a large number of property owners have also benefited from the growth in the value of their homes, which has reached hundreds of percent. Therefore, most of us should not be sad if in 2023 prices stagnate or even decline by a few percentage points – the growth so far has been impressive, which would not embarrass Warren Buffett himself.