Sales of New Apartments in Tallinn Rose by 23.4% in 2024

Typically, the largest number of transactions with new homes occurs in the last months of the year, which is related to buyers' desire to implement their purchase decisions by the end of the year. Developers also complete many new homes during this time and want to finalize year-end results with apartment handovers. 2024 was no exception; in the last quarter, 453 new apartments were sold in Tallinn, which is 63% more than in the third quarter. Compared to the fourth quarter of 2023, the number of new home transactions increased by 47% in the same period of 2024.

"Consecutive interest rate cuts and expectations for their continued decline have encouraged previously postponed purchase decisions. Competition in the lending market has brought consumers more favorable loan terms, which also encourages transactions," explains Bonava's Head of Sales and Marketing Lauri Laanoja.

According to unofficial land registry data, 735 transactions were concluded in Tallinn in December with residential apartments in private ownership, so a total of 2,344 apartment transactions were made in the fourth quarter, which is 201 more transactions than in the third quarter. Compared to the fourth quarter of 2023, there were 7% more apartment purchase and sale transactions in Tallinn. In total, 8,125 apartment ownership residential transactions were concluded in Tallinn in the past year, which is approximately 5% less than in 2023.

However, Tallinn's new home sales figures show clear growth both compared to the previous quarter and to 2023. According to Citify data, 190 new homes were sold in Tallinn in December, so the fourth quarter's new home sales result is 453, which is 175 more than in the third quarter. When comparing the fourth quarter new home sales figure to the same period in 2023, the increase was as much as 47%. Throughout 2024, the number of new home transactions has grown 23.4% compared to the previous year.

"We started 2024 with cautious optimism that the real estate market had weathered the most difficult period and was slowly raising its head. Year-end sales results show that's exactly what happened. Although the number of transactions in summer and early fall remained more modest than hoped, a strong year-end brought sales figures similar to boom times in Tallinn," comments Laanoja.

Citify.eu data shows that Hepsor sold the most new homes in Tallinn in the fourth quarter, and based on full-year results, Bonava, Liven, and Merko are at the top of the capital's new home sales rankings.

The average price per square meter of newly sold apartments in Tallinn in the fourth quarter was 4,883 euros, in the same period of the previous year the average price per square meter was 4,071 euros. Throughout 2024, the average price per square meter of newly sold homes was 4,438 euros, in 2023 it was 4,193 euros.

The most new apartments were sold in the fourth quarter in Haabersti district, which is also where the most new homes have been sold throughout the past year, followed by the City Center and North Tallinn. The largest selection of new homes is currently available in the City Center – 744, the smallest selection is in Nõmme (13) and Lasnamäe (96).

"2024 was favorable for home seekers because supply was abundant, developers ran discount campaigns or offered various added values with purchases. Looking at the year ahead, we expect price increases, both due to construction cost growth, which particularly affects new project prices, and due to a decrease in supply, as developers started fewer projects in the past year. The summer VAT increase also has an impact," says Bonava's Head of Sales.

The supply of rental apartments in Tallinn has gradually increased since the end of summer. If 2024 started in Tallinn with nearly 1,900 rental offers, which declined to the market's typical 1,300 offers by summer, the year ended with over 1,500 rental apartment offers. "Competition in the rental market remains tight, and as a professional market operator, we see our rental building with over 90% occupancy and, based on direct customer feedback, long-term rental of a new home from a trustworthy company with professional customer service is well-received," believes Lauri Laanoja.