Expert: New Apartments in Tallinn Have Proper Price Buffer, Almost Non-existent in Nearby Municipalities

According to Sten Renar Subatšjus, the analysis director of Estonia's largest real estate agency Uus Maa, the difference between the asking price and actual transaction price for new developments in Tallinn is on average 8-10%, but in the suburbs of the capital, prices are lower and there is almost no room for negotiation.

According to Sten Renar Subatšjus, the average asking price for apartments in Tallinn is slightly above 5,000 euros per square meter, but transactions are taking place at 4,600 euros. "At the same time, the asking price per square meter for apartments in Tallinn's suburban areas is slightly above 3,500 euros per square meter, and transaction prices are only 30 euros lower, meaning the actual room for negotiation is very thin," said Subatšjus.

"The small gap between asking and selling prices indicates, on one hand, that pricing in the suburbs is closer to the actual market price and there is not much air built into the prices. On the other hand, it also shows people's more serious interest in apartments in the Tallinn surrounding area – people are not looking to get a big discount, but are willing to pay the asked price," added Subatšjus. 

"The greater room for negotiation in new apartments in Tallinn is supported by several factors at once – on one hand, the sale of new developments is struggling more here than elsewhere – only about ten percent of all transactions are currently made with new apartments. The inventory of unsold new apartments has already stretched for over two years, and competition between developers is growing, which is why they are willing to come down more from their initial expectations," said Subatšjus.

"The largest inventory of unsold apartments is currently in the more expensive areas of the capital – 26% of all new apartments are in North Tallinn and 23% in the City Center. Transaction activity and demand are rather concentrated in the outer city areas or outside the city limits," said Subatšjus.

"For Tallinn's new developments, this year's year-end sales period is significant - whether transactions can be completed during what is typically an active time. Larger developers are affected less by the struggling sales, as they have planned for longer sales periods. It is rather the smaller developers who may face difficulties, those without large liquidity buffers and who are therefore willing to give more on price," added Subatšjus.