Eamets: Second-hand apartment transactions outside Tallinn drove the housing market recovery in the second quarter

The condition of the housing market is best indicated by real estate prices. When demand begins to grow, prices also start to rise. Data released by Statistics Estonia today shows that apartment prices increased by 5.3% year-on-year in the second quarter, while house prices rose by 6.8%. The volume of transactions was lower than a year ago, except for the volume of second-hand apartment transactions outside Tallinn, which increased.

Real estate prices have grown faster compared to incomes over the past 6-7 years. This is especially true in larger centers, which is also evidenced by the fact that transaction volumes in Tallinn decreased. For many families, prices have become too high. If we look at average wage growth from the pre-corona period, then in comparable periods (2019 Q2 compared to 2026 Q2), the average wage has grown by 62% over 7 years, while housing has become more expensive by an average of 92%. For this reason, it is understandable that the purchase of second-hand apartments has increased, because their price is simply more affordable. The lower price of second-hand apartments is also supported by the fact that outside the major centers, state-funded apartment building renovations have occurred much less compared to the three largest centers. According to a report commissioned by the Ministry of Climate, in 2010-2024, 58% of renovation projects went to Harju, Tartu, and Pärnu counties, leaving 42% for the remaining counties.

If we want people to move to the countryside more, for example to increase the birth rate, then we must prioritize and support the construction and renovation of the housing stock, especially outside major centers.