Estonian Apartment Prices and Market Expectations in 2025

Understanding the dynamics of the real estate market is extremely important for buyers, sellers, and investors who want to make informed decisions in the Estonian real estate market. How have apartment prices evolved in recent times and what changes can we expect in 2025? We provide a comprehensive overview of the current state of the Estonian apartment market and future prospects, based on the latest data and analyses.

Apartment prices in 2025: situation and development

By March 2025, the median price of Estonian apartments has risen to 2209 euros per square meter, showing a 3.8% increase compared to February and a significant 10% increase compared to March 2024. This statistic comes from Arco Vara's market analysis, which provides valuable insights into the movements of the Estonian real estate market.

However, the price increase is not uniform across the entire country – in Tallinn, there is noticeable growth due to a larger share of new apartments on the market. The capital's real estate market resembles a kind of mosaic, where new developments create islands that raise average price levels, while neighborhoods with older buildings show more stable or even slightly declining price trends.

At the same time, it is important to note that the prices of older apartments have remained more stable in most Estonian cities or have even fallen, being a few percent lower than at the beginning of 2024. This creates an interesting contradiction where the statistical increase in average price may not reflect the actual situation in each market segment. Therefore, buyers should look beyond average indicators and analyze specific areas and apartment types.

Transaction volume and dynamics

The number of transactions has decreased somewhat compared to the previous year. According to Domus Kinnisvara data, 3603 transactions were registered in May 2024, which is 4% less than in April and 12% less than in May 2023. The total value of transactions reached 371 million euros in May.

Such data suggests that the market has consolidated somewhat, but remains active. Buyers have found previously discounted real estate, which partly explains the decline in transaction numbers but stable price dynamics.

The decline in transaction numbers may also reflect buyers being more selective and cautious. The real estate market has become somewhat of a buyer's market, where potential homeowners take more time to decide and look for the optimal price-quality ratio. This is a natural phenomenon as the market matures after a more intensive period.

Forecast for 2025

According to Arco Vara's analysis, the current price increase is not so much linked to the beginning of a new price increase cycle, but rather to changes in the structure of apartments being sold. A larger share of new apartments on the market, especially in Tallinn, raises average price levels, while older apartment prices have remained more stable.

For 2025, we can expect continued moderate price growth, supported by new developments and changes in market structure. However, several external factors may influence market dynamics, including:

• Changes in interest rates – their potential decline could invigorate the market

• The overall state of the economy – economic growth directly affects people's purchasing power

• Inflation and purchasing power changes – wage growth versus cost of living increases

Real estate has historically been a good hedge against inflation, so continued moderate inflation may also support the attractiveness of real estate investments in 2025. At the same time, buyers have become more price-sensitive and increasingly value energy efficiency and opportunities for optimizing utility costs.

Practical tips for real estate transactions in 2025

For buyers, it is important to consider both regional differences and the condition of the apartment. There are significant price differences between new and older apartments, which allow for strategic choices according to budget and needs.

If you are buying an older apartment, it is especially worth thoroughly examining the building's condition, renovation history, and the size of the repair fund. Energy efficiency and the size of utility costs are also of critical importance, especially for a long-term investment. A more expensive but energy-efficient apartment may prove to be a more economical choice in the long run.

Sellers should bear in mind that the market has become a buyer's market, where buyers are more informed and willing to make a transaction only at a fair price. Proper preparation of the handover-acceptance act is an important step in concluding a transaction, ensuring confidence and legal protection for both seller and buyer.

If you are selling an apartment, realistic pricing is key. Too high an initial price can significantly extend the sales period, which in turn affects both the final transaction price and potential additional costs.

For investors, the rental market still offers opportunities, although there is less data on rental price dynamics. It is important to note that the repair fund is an agreement between the landlord and tenant. Investors should also keep in mind that early termination of a fixed-term lease can create unexpected costs and problems.

Regional characteristics

The Tallinn market stands out from the rest of Estonia by having a larger share of new apartments, which raises average price levels. This is particularly noticeable in the city center and areas with new developments. Apartment prices per square meter in the capital are often 30-50% higher than in other major Estonian cities.

At the same time, other Estonian cities and rural areas continue to offer more affordable options, especially in the segment of older apartments. For example, in Tartu, Pärnu, or Narva, you can find apartments in older buildings where the price per square meter is significantly lower than Tallinn's average figures.

Another important aspect is regional infrastructure and development prospects. New transportation solutions, schools, kindergartens, or shopping centers can significantly affect the value of real estate in a particular area. Therefore, it is worth investing in areas where infrastructure development is taking place or planned.

If you are looking for a suitable apartment, Kinnisvara24 portal offers a wide selection of both apartments for sale and rental apartments directly from the owner. It is also worth getting acquainted with new developments, which can offer modern solutions and energy-efficient homes.

International investors can find interesting opportunities outside Estonia as well. Real estate abroad can offer both diversification opportunities and potentially higher returns, depending on the target country's economic situation and real estate market.

Summary

The 2025 Estonian real estate market shows moderate price growth, driven mainly by a larger share of new apartments on the market. The prices of older apartments have remained more stable or have even declined, giving buyers the opportunity to make thoughtful choices according to their needs and budget.

A successful real estate transaction in 2025 requires good market knowledge and consideration of regional characteristics. Check kinnisvara24.ee and make a successful transaction!