Expert: Pent-up Demand Has Emerged in the Real Estate Market
The stagnation in the real estate market lasting the past couple of years has created pent-up demand and long-delayed home purchases are now being put into action. According to Martin Vahter, CEO of 1Partner Real Estate, this can be concluded both from feedback from real estate agents and from banks increasingly issuing more home loans.
"The question is not right now whether we are exactly at the bottom, but how quickly we get out of it and what level we reach," said Martin Vahter, CEO of 1Partner Real Estate, who believes that people have postponed their decisions for so long that many are now reaching the point of making deals.
According to 1Partner's CEO, in a couple of years when looking back at 2024, it could be seen as a moment when the real estate market in Tallinn had the best buying opportunities of the decade – banks were lending, prices had not risen, and there was still plenty of selection to choose from. "The exact moment when the rise began will only become clear in hindsight. For a buyer, so to speak, hitting the bottom is a kind of lottery, but what is certain is that there are no preconditions for a significant decline from the current level, since the input prices of new projects have already risen," Martin Vahter said.
According to Martin Vahter, most transactions are currently taking place in Tallinn and in the immediate vicinity of the capital at a price level that stays below the 150,000 euro mark. "In such a range, competition between buyers is sometimes already quite tight and real estate agents do not have much need to push owners to adjust the price to match the market situation," said Vahter.
However, according to Martin Vahter, there is still some headwind blowing against the prospects for real estate market activation. "The European Central Bank's first interest rate cut in June was indeed a small step in the right direction, but a prolonged economic recession is still ongoing and inflation has not completely disappeared either," he explained.
