Apartment Market in Early 2026: Prices Rise, Transaction Activity Remains Modest

Statistics from the beginning of 2026 show that the apartment market is gradually moving toward recovery - prices are on an upward trend, while transaction activity remains below the previous year.

Tallinn and Harjumaa prices reflect stability

The Estonian apartment market has remained on a stable course at the beginning of 2026 - transaction activity is somewhat lower compared to the previous year, but prices have moved upward. In Tallinn, 662 apartment purchase and sale transactions were completed in February, which is approximately 8.6% less than a year ago, but about 6% more than in January, indicating market revival from the start-of-year lull. The median price per square meter of apartments was 2,891 euros in February, representing a 2.6% increase year-on-year. During the first two months of 2026, a total of 1,287 transactions were completed in Tallinn, which is approximately 10.6% lower than the same period last year. At the same time, the weighted average median price reached 2,938 euros per square meter, exceeding last year's level by approximately 3.8%.

These figures point to a situation where price levels remain on an upward trend despite more modest transaction activity. The Tallinn apartment market is therefore moving at a more balanced pace, where price changes are not sharp and market development reflects rather gradual adjustments.

Regional trends in Tartu and elsewhere in Estonia

Regional differences in the Estonian apartment market are clearly emerging at the beginning of 2026, reflecting different market dynamics outside the capital. In the Tartu apartment market, 99 purchase and sale transactions were completed in February, which is 6.5% more compared to the same period last year. Compared to January, the number of transactions decreased somewhat, and the market has remained at approximately the 100 transaction level for several months. The median price per square meter of apartments was 2,237 euros, remaining practically at the same level as a year ago (−0.4%), pointing to price stability.

In the Pärnu apartment market, February was more active by contrast. 65 transactions were completed, which is 18.2% more compared to last year and 25% more compared to January. The median price of apartments reached 2,101 euros per square meter, growing over 14% year-on-year. The overall picture for the first two months of the year is also positive: a total of 117 transactions exceeds the same period last year by more than one-fifth, and the average price level has increased by approximately 8.8%.

In the Narva apartment market, 52 transactions were completed in February, which is 8.3% more year-on-year, but activity remained at the same level compared to January. The median price per square meter of apartments was 401 euros, representing approximately a 10.4% decline compared to the previous year. Over the first two months of the year, both the number of transactions and the price level fall below last year's figures, pointing to continued more modest market activity.

Such regional diversity shows that the Estonian apartment market is not moving at a uniform pace - while some cities are showing clear growth, other markets remain more stable or are moving in a downward trend.

Economic background and the impact of Euribor decline

The economic backdrop at the beginning of 2026 remains changeable, but offers both challenges and adjustment opportunities for the real estate market. The six-month Euribor, to which many Estonian home loans are tied, has risen to approximately 2.6 percent, and according to market expectations, it could move toward around 3.2 percent by the end of the year. Interest rate movements are influenced primarily by international uncertainty and inflation expectations, which keep financial markets cautious.

For home loan borrowers, the Euribor increase does mean higher monthly payments, but according to banks' assessments, borrowers have generally accounted for this risk and decisions are not made solely on the basis of short-term interest rate movements. It is also important that from a historical perspective, today's interest rate levels remain below previous peaks, which helps keep the situation under control.

Although the interest environment may remain somewhat tense in the near term, clearer expectations and market adjustment create conditions for more stable development. This gives both buyers and investors a better opportunity to make informed and long-term considered decisions in the real estate market.

Rental market and investment opportunities

Tallinn's apartment rental market has been under pressure in recent years, but early 2026 data points to stabilization and the possibility that returns may gradually begin to recover. In January, the average rental yield reached 3.3 percent, which is the lowest level in recent years.

The average rental price of Tallinn apartments has increased by 2.3% over the year, reaching 752 euros in January. At the same time, apartment sale prices have grown much faster - 12.3% - which has kept yield under pressure.

In residential neighborhoods, rental yields are higher than the average. In the Old Town it reached 4.5 percent in January, but there the average is affected by individual exclusive objects. Setting aside the Old Town's special characteristics, the higher-yield areas are Mustamäe and Lasnamäe, where yields were 4.17% and 4.14% respectively. Mustamäe's yield has been the most stable over the year, changing only by 0.07 percentage points. In Haabersti the yield was 3.2%, which is declining compared to earlier, but is still higher than the city average.

For one-room apartments, the calculated rental yield exceeds 4.5%, reflecting stronger demand for smaller apartments. Micro-apartments, especially near universities, in Kalamaja and the City Center, remain popular with both students and single-living individuals.

On a broader level, the rental market is influenced by the fact that apartment sale prices have grown faster than rents, and some people therefore remain in the rental market for longer periods. At the same time, rental prices in recent years have grown more slowly than inflation, but market signals point to growth potential and analysts believe that yields may gradually begin to recover.

Strategic approach to the purchase and sale process

When planning transactions, it is important to understand the subtle difference between asking prices and actual transaction prices, which is the foundation for successful negotiation. Statistics show that in Tallinn, asking prices are often 36-39 percent higher than final transaction prices, leaving astute negotiators sufficient room to achieve the best deal. This dynamic means there is an active bargaining space in the market, and both buyers and sellers are open to constructive dialogue.

Sellers are advised to familiarize themselves with the article explaining when is the best time to sell an apartment, in order to time their process to achieve maximum visibility. The right strategy, which includes professional presentation and realistic pricing, helps find a suitable transaction partner faster, even when competition has intensified. A knowledgeable seller takes advantage of the market recovery and increased buyer interest, emphasizing their real estate's unique advantages and energy efficiency.

If you want to keep an eye on the latest trends and find the best offers, Estonia's most comprehensive real estate market statistics environment and our convenient search system are here to help you at every step. Use these tools to make your next real estate decision with confidence and awareness.