Expert: Three-Year Fall in Real Estate Prices on Tallinn Apartment Market Coming to an End

According to Argo Pillesson, the head of Estonia's largest real estate office, a three-year decline in real prices on Tallinn's apartment market is coming to an end – price statistics show that the pace of inflation-adjusted apartment price decline has slowed, and a turning point may be expected this year.

"In nominal terms, measured in euros, Tallinn apartment prices have been essentially flat for the last three years, but we have long been in a high inflation environment, which has reduced the average price of Tallinn apartments by about 14% in terms of purchasing power over the last four years. The same magnitude was the inflation-adjusted real price growth in the early part of the decade, in 2020-2022. In terms of real estate purchasing power, we have thus come full circle back to pre-Covid times. Figuratively speaking – when selling the same apartment, you can buy exactly the same amount of goods from the store with the money received as in 2020, meaning the apartment price has risen proportionally to inflation," Pillesson said.

"Transaction activity has been quite high over the past year, and the first quarter of 2026 also showed solid results with 2,070 transactions, which is 2.4% above the 15-year average. Against the backdrop of high transaction activity, apartment selling prices have also begun to gradually creep upward. The median price for Tallinn apartments in the first quarter of 2026 was 2,893 €/m2, which represents 2.5% growth in year-on-year comparison, the best figure since 2023," Pillesson said.

"At the same time, wages have grown many times faster than apartment prices. A 50-square-meter Tallinn apartment costs approximately 73 median monthly salaries in Harju County today, whereas in 2020 this figure was around 80 and at the end of 2022 it was 93. The buyer's position, or essentially apartment affordability, has never been this good in this decade," Pillesson added.

"If inflation remains below 4% year-on-year and transaction activity stays at a similar level, it is realistic that by the end of the year we will reach a turning point where Tallinn apartment real prices also turn to growth. I would be willing to bet on that. This is also supported by the expected change in transaction structure in 2026, namely the recovery of the new development market, which will bring more high-priced transactions into the statistics. In the long term, the fact that real estate price growth typically exceeds inflation is a macroeconomic truth," Pillesson noted.

"Tallinn's transaction statistics this year show that January and February were weaker compared to last year – 12.5% and 8.5% fewer transactions were made than a year earlier, respectively. March, however, turned strong – with 778 transactions, activity grew 8.4% year-on-year, which brought up the first quarter 2026 average. Across Estonia, 8,978 real estate transactions were made in the first quarter, which is 1.8% less in year-on-year comparison, but the total value of transactions grew 2.7%, reaching 1.196 billion euros. In March, a clear activation of the market was noticeable, and it can be said that the geopolitical tension stemming from the Iran conflict, fuel price increases, or the six-month euribor rise to 2.5 percent have not had a significant negative impact on Estonia's real estate market activity," Pillesson said.