Eamets: Building Permit Applications in Tallinn Decreased by 70% in Q3

The Statistics Office released information today, in addition to various price indices, about how many building permits were requested for residential construction in the third quarter of this year and how many usage permits were issued. Additionally, there will also be information about how much construction activity was started, since requesting a building permit does not automatically mean the start of construction work.

If we look at the general statistics, in the third quarter of this year, building permits were requested for 130.5 thousand square meters of construction, and construction was started on 115.5 thousand square meters. We are talking about new residential buildings, not renovations. If we talk about units, construction was started on 364 residential buildings of various sizes (this also includes apartment buildings) and building permits were requested for 509 residential buildings.

Compared to the same period last year, residential construction volumes have decreased. New building permits were requested for a full 29% less than a year ago, in terms of area or square meters, the decrease was 27%. This is quite a significant decrease when you consider that the third quarter is one of the busier times for starting construction. When else should you build if not in summer?

Behind the decline was primarily the decrease in new residential construction volumes in Tallinn and Harjumaa. In Tallinn, the number of building permits issued for new residential buildings decreased by a full 71% year-on-year, the start of construction decreased by 29%. The number of usage permits issued in Tallinn, however, increased by 23%, which shows that the third quarter of 2025 was very fruitful in residential construction.

While construction volumes decreased across Estonia, in a number of counties residential construction grew in both building permit issuance and construction starts. Significant growth, that is more than doubled, occurred in building permit volumes (in square meters) in Hiiumaa, Jõgevamaa, Viljandimaa and Võrumaa. It's true that the absolute volumes are not very large, which means that the addition of one or two larger apartment buildings immediately pushes the growth numbers up. In Tartu city, new residential building permit volumes grew as much as 3 times. A year ago in the third quarter, building permits were requested for 6,000 square meters, but this year already for 19,000 square meters. It looks like a modest sort of construction boom. However, construction was started on 7,000 square meters, which is roughly the same level as a year ago.

In many counties, building permit requests decreased just as they did in the capital - in a full 9 counties, building permit requests were smaller than a year ago. Larger declines were, in addition to Tallinn, also in Tartu County and Lääne-Viru County.

The number of usage permits issued increased in the third quarter, in addition to Tallinn, also in Ida-Viru, Jõgevamaa, Hiiumaa, Võrumaa and Tartu city. Elsewhere, fewer usage permits were issued than a year ago.

The boom in new construction is somewhat dampened by increasing interest rates and very large infrastructure construction volumes. The construction of Via Baltica and Rail Baltic is also raising the prices of building materials and has already caused temporary shortages of certain materials.