Bonava: Large Parking Demand Could Create a Shortage of Two-Bedroom Apartments in the Market

There may be a shortage of affordable two-bedroom apartments on the new apartment market, as their larger share in developments increases the need for parking spaces and thereby apartment prices, said Bonava sales and marketing director Lauri Laanoja. 

 Based on Bonava's sales experience, the broadest buyer base today is interested in well-planned two-bedroom apartments of approximately 40–44 square meters. These apartments appeal to young people looking for their first home, couples, people living alone, as well as those moving to smaller living spaces. 

„One might ask why we simply don't build more two-bedroom apartments. The reason is simple. The more compact apartments we plan for the same construction volume, the more households move into the building and the greater parking needs we must account for. Since large above-ground parking lots are not recommended for maintaining a quality living environment around buildings, cars must often be moved underground or into the building. However, such a solution is considerably more expensive than courtyard parking and inevitably raises the price of new homes," noted Laanoja. 

According to him, especially with two-bedroom homes, the total price of the apartment is particularly decisive in the purchase decision – even a difference of a few thousand euros can determine whether a home fits within a buyer's budget or not. 

„People are not necessarily looking for the smallest possible apartment, but a sensible home where every square meter is well used. A separate bedroom, a comfortable living room, sufficient storage options and thoughtful furniture placement fit within 40–44 square meters if the layout is functional. The advantage of such an apartment is a lower total price, but this advantage may be lost due to parking development costs," explained the Bonava representative. 

This may, in his assessment, create a conflict with actual market demand: buyers need more compact and lower-priced homes, but high parking requirements make their construction more expensive and may direct developers to plan fewer and larger apartments for the same area. 

He stressed that a possible deficit does not affect all two-bedroom apartments uniformly. The market may have sufficient large or higher-priced two-bedroom apartments, while there may be a shortage of precisely those approximately 40–44-square-meter functional homes whose location, layout and total price form a suitable package for the buyer. 

The search for a more reasonable total price is directing increasingly more buyers to look at new developments in Tallinn's neighboring municipalities, according to the Bonava representative. In Tallinn, 824 new homes have been sold from the beginning of the year until now, while in Tallinn's neighboring municipalities 356 apartments have already been sold – thus the volume of neighboring municipalities makes up approximately 43% of Tallinn's volume. 

„We see this also in Saku, where our first building of Kirsioue, which will be completed in August, has maintained steady interest. Buyers find a new home with a lower total price in Tallinn's vicinity without giving up everyday services or good connections to the capital. Tallinn's neighboring municipalities are often favored for their more spacious space usage as well. In Kirsioue, parking is solved outdoors, but at the same time there is sufficient space for greenery, play and recreation areas, as well as a pleasant living environment. This way we can account for people's actual parking needs without expensive underground parking spaces raising home prices to the same extent," said Laanoja.