Expert: Estonia's Real Estate Market Expects Several Changes This Year

According to Jaanus Laugus, the head of Estonia's largest real estate office Uus Maa, the real estate market this year expects continued price increases and declining sales volumes, and next year an even greater shortage than the current one will arrive.

According to Jaanus Laugus, a slight price increase in real estate will continue throughout this year due to the shortage and rising costs of building materials. "Developers certainly won't rush to make any price cuts, rather they raise prices or simply don't sell at all. It's clear that nothing will become cheaper in the near term," said Laugus.

"At the same time, both buyers and developers are taking a wait-and-see approach and are not rushing blindly into transactions. There are also signs of slowing monetary printing and rising loan interest rates, which reduce transaction volumes. Currently there is great interest in more or less finished real estate developments, where the walls are up and windows and doors are ahead, and the prices of such properties have already been raised by 15-20%. But new developments are being sold and bought on paper quite rarely right now," said Laugus.

"In broad terms, one should expect a decrease in the volume of completed new apartments and such a stall could last a year or two, until the world starts functioning normally again. Then prices should also remain stable. Developers are still buying plots together to be ready for a new surge in activity, but before that arrives, a new wave of shortages will hit," warned Laugus.

"This year has clear trends of rising land prices, the suburbanization of Tallinn, and growing popularity of small towns. While interest in owning a detached house has been steadily declining over the past decade, it is now clearly on an upward trend. People are looking for larger plots and homes that would accommodate a home office, a workout corner, and a playroom for children," added Laugus.