Expert: The Number of Tenants in Real Estate is Declining, More Buyers Needed

Along with the growth in real estate purchase and sale transactions in recent months, a slight cooling of the rental market is also noticeable in the real estate market, describes 1Partner Real Estate director Martin Vahter the latest trend. 

"Well, this is a kind of communicating vessels effect, because the number of people needing a home is roughly the same in the big picture. If a couple of years ago many had to freeze their purchase plans and there emerged new rental enthusiasts, then now there is in turn movement back to the buying side," explains Martin Vahter and adds that on a large scale there is nothing bad in the rental market. "Rental prices remain stable, but overall demand is lower and therefore finding a new tenant may take somewhat longer compared to before," notes the 1Partner director. 

The 1Partner director points out that if last year larger apartments from new developments were the most sought-after goods in Tallinn's rental apartment market, where one could find a tenant even more easily than for a 2-room apartment, then by now the picture has also become more uniform in this regard. "Along with the restoration of borrowing capacity, it is rather the larger family apartments where the rental space is desired to be exchanged for one's own home," explains Vahter, according to whom the continued decline in interest rates has made lending conditions favorable again. 

According to the 1Partner director, the current change in the market is entirely logical. "In the long perspective, buying your own home is always more beneficial than renting. Real estate is an investment in the future, whose value grows over time, while with rental payments you are betting monthly on someone else's assets," emphasizes Vahter.