The Facts on the Table: Did This Year's Real Estate Forecasts Hold Up?
Various real estate experts predicted that apartment prices would rise by approximately 5% this year and transaction numbers would grow by 5–10% compared to last year. How the market actually behaved becomes clear from Kinnisvara24's statistics overview.
"The apartment market shows clear signs of improvement this year and several positive developments have taken place," confirmed Kinnisvara24 CEO Urmas Uibomäe. According to the Land Board and Spatial Planning Board, the number of transactions in Estonia as a whole grew by 8.1%, and a total of 17,901 apartment purchase and sale transactions were conducted over ten months. Changes are particularly noticeable in the capital and its surroundings: transaction numbers grew by 13.5% in Tallinn and 12.8% in Harju County.
According to Kinnisvara24 portal statistics, apartment listing prices rose by 4.6% in the ten-month comparison, and transaction prices grew by 5% according to the Land Board and Spatial Planning Board data. This almost completely matched the forecasts experts gave at the beginning of the year. The annual average transaction price was 2,032 euros per square meter.
"Lower Euribor and more favorable lending conditions have significantly increased buyer activity, and the tax relief that will be lost from next year has encouraged more and more people to take out housing loans in recent months," explained Uibomäe on the reasons for market improvement. According to Bank of Estonia data, 15% more housing loans have been taken out over ten months this year than at the same time last year. Due to the Euribor decline, the average interest rate has decreased by approximately one percent.
While the apartment market has clearly accelerated this year, the situation in the houses segment is the opposite – according to Land Board and Spatial Planning Board data, the number of transactions decreased by approximately one-fifth over three quarters. In summer, 64% fewer transactions were conducted with houses than a year earlier. However, house transaction prices have still risen slightly and Kinnisvara24 statistics show an increase in new listings.
"The persistent inflationary environment continues to keep both houses and new apartments out of reach for many buyers. However, they have their own specific buyer base," acknowledged Uibomäe. According to him, next year also promises moderate growth for the real estate market.
