Expert: When Buying a New Home, Age Increasingly Determines Where and What You Buy

In the case of new homes in Tallinn, age-based dividing lines have emerged, where younger buyers primarily purchase homes in suburban and neighboring municipality developments, while homebuyers in the city center and other trendy areas are dominated by those over 40 years old, comments Tanel Tarum, head of 1Partner Real Estate.

According to the head of 1Partner, such a buyer profile primarily reflects the presence of capital necessary for home purchase. "Buyers of new developments in the Greater Tallinn area are primarily young families in their early thirties moving from their old "soviet-era" apartment to their first truly new home, for whom this is often their first serious real estate investment," says Tarum and adds that for families with small children, alongside a family-friendly environment and home size, the amount of the loan down payment and monthly payments play a very important role. "The most important thing is to make a bold decision and buy a new home and do it according to your abilities, without taking unnecessary risks. If opportunities grow over time, living conditions can always be improved," he emphasizes.

Buyers of trendy, more expensive new developments, on the other hand, are typically mature families in their forties, which was recently confirmed, for example, by the developer of Volta quarter. "For buyers in this age group, it is usually their second or even third home purchase, and their goal is primarily to improve their quality of life - they are looking for a better location, quality architecture and greater conveniences," explains Tarum.

According to the head of 1Partner, in the more expensive segment it is typical that funds released from the sale of previous real estate are directed towards the down payment for a new home, which allows for a significantly higher price range. "An older buyer usually has also accumulated more capital and after selling an existing home, is ready for a larger personal contribution or even a debt-free home purchase," explains Tarum and provides evidence for his words with data recently published by Swedbank, according to which the average home loan amount among those over 40 years old begins to decrease slightly.

The youngest segment, namely buyers in their twenties, are in the minority on the new development market according to the head of 1Partner. "The vast majority of young homebuyers snap up smaller and more affordable apartments on the secondary market. If they do buy a home in a new development, it is often done with the help of parents, and in such cases, the actual buyer for their transactions can be considered to be those over 40 years old who help finance the transaction for the younger generation," notes Tarum.