Expert: Sales More Than Doubled in One New Development Segment
Row houses have become the most popular product in new developments in Tallinn and Harju County, with sales more than doubling in the second quarter compared to the same period last year, comments Invego CEO Kristjan-Thor Vähi.
The total number of new development transactions increased by approximately one-fifth in the second quarter compared to the first quarter. "June was active, and buyer interest has not declined in July either. So it can be said that the introduction of the new VAT rate did not bring about any major shift, and rather it is a matter of the general recovery of the market and growing purchasing interest," analyzes Kristjan-Thor Vähi, but adds that those who had made their decision went to extra effort in June to close the deal at the lower tax rate.
According to the regular market overview of new developments compiled by Adair CEO Tõnu Toompark, general transaction activity increased by one-third in the second quarter compared to the same period last year, but row house sales increased by as much as 120%. "Behind these numbers, of course, is primarily greater buyer interest, but also the strong developers' readiness to offer a well-thought-out product at an affordable price," says Vähi, who believes that the current trend could reverse soon if rising construction costs cause the price difference between row houses and larger family apartments to increase. "The market is certainly active, but the buyer is rational and sufficiently price-sensitive."
Vähi emphasizes that the sales success of row houses is largely due to sufficient volume of successfully positioned products. He gives an example of Uus-Järveküla residential area, a joint project of Invego and EfTEN Capital, consisting of 165 row houses and semi-detached houses in total, where the active sales period fell in the last 2-3 years, when the real estate market has generally been in a downturn. "Behind the rapid growth of the past year are both houses ready for occupancy and also some fomo-effect, as by now only a small tenth of the homes in the entire development remain unsold," explains the Invego CEO.
Uus-Järveküla residential area is developed by Invego and the project's financial partner is EfTEN Capital's real estate fund EfTEN United Property Fund. Uus-Järveküla was designed by PIN Architects and construction work is managed by NOBE. In Uus-Järveküla, shops, schools and kindergarten are conveniently nearby and there is good connection to the city by both public transport and car.
Invego is a next-generation real estate developer operating in three countries, specializing in the development of large residential areas and business quarters with comprehensive concepts that create urban spaces of the future. Invego group companies in Estonia, Latvia and Portugal currently have about 30 different development projects underway. Invego has developed 150,000 m2 including 1,300 homes and more than 50,000 m2 of commercial space, and has another 450,000 m2 of residential and commercial real estate under development.
Among companies developing real estate in Tallinn and its vicinity, Invego is in second place by number of new homes sold over the last five years with 900 homes. The largest developments to date completed are Vana-Peetri, Tiskreoja and Tabasalu Kodu, and currently ongoing are Luccaranna, Uus-Järveküla and Keila Pargikodude residential areas.
In the capital of Latvia, Invego is developing the residential area Vitolu Parks and Mārupes Sirds, together with development partner Reterra Parka Kvartals, Skanstes Residences and Miera Residences, and row houses in the Vide Adaži development near Riga.
In southern Portugal, Silves Hills is under development spanning 65 hectares with 154 villas, which are suitable for both year-round living and seasonal use.
