Expert: There is no summer break in the real estate market, the thoroughness of home buyers' preparation is astounding
Tallinn's real estate market has not experienced any quieter vacation mood this summer, as homebuyers have done extraordinarily thorough preparatory work and are finally tired of waiting for the "right moment," says 1Partner Real Estate consultant Alar Voogla.
The past three years have been relatively calm times on the Estonian real estate market, but the expected decline that many home purchase planners hoped for never materialized, and so people have adapted to the market's new reality and no longer recommend postponing purchases. "Consumer confidence has not yet fully recovered, but in many families who have postponed home purchases, even the youngest children are now starting school. So they have become tired of waiting for the most favorable purchase moment, and the internal desire to complete a transaction is strong," explains experienced real estate consultant Alar Voogla, describing a clearly perceptible emotion.
According to 1Partner Real Estate expert, the biggest surprise of recent months is not the market's activity, but how thoroughly many families have prepared themselves for a purchase. "Transactions are clearly need-based and emotional purchases are essentially not made in the market. People know exactly what they want and have also calculated all associated costs down to the details," Voogla comments.
According to the consultant, today's homebuyer is characterized by thorough knowledge of both their own financial capability and loan terms, as well as costs associated with purchase, construction, renovation, and furnishing. "Alongside the home loan payment, the calculations include a number for monthly expenses, and decisions are made considering total cost, not just the purchase price," explains Voogla, who notes that slightly more expensive but well-maintained real estate is often preferred, which does not require additional investments. "Falling interest rates also support this, which allow people to afford more expensive property," he adds.
The purchase decision in favor of real estate requiring renovation is only made if its price is correspondingly lower, since the buyer has already calculated the necessary additional costs in advance. This puts increasing pressure on sellers who must be realistic in pricing their property. "On the secondary market, sellers tend to overprice their property, since they do not account for post-purchase investments that the new owner must make. In today's market, there simply is no buyer who has enough spare cash to start major renovations right away. If the property requires renovation, this must be reflected in the selling price," emphasizes Voogla.
1Partner is the leading real estate group in the Baltic countries with more than 20 years of experience, with offices in Tallinn, Tartu, Riga, and Vilnius. The 1Partner group provides real estate brokerage, appraisal, construction, development, management, and investment management services. The 1Partner real estate group is the official cooperation partner in the Baltics of JLL (Jones Lang LaSalle), the world's largest commercial real estate consulting company.
