Good Architecture and Luxury are Increasingly Valued

Although times are challenging, interest in luxury and exclusive real estate remains high. It is an asset class whose value grows steadily and which also weathers economic downturns better.

As an appreciator of good architecture and a player in the real estate market, I am pleased to note that Estonians have begun to appreciate quality and architecturally thoughtful aesthetic living environments much more compared to years ago.

For me, good architecture is something that fits the chosen environment. When we talk about residential properties, excellent architecture should reflect the surrounding environment, so that the two seem to blend into each other, intertwine with one another. Just as much as a building should fit its surroundings, the people living in it should also feel at home.

In the real estate world, such houses and apartments are called premium-class real estate.

The market stabilizes, demand persists

The hot spring and summer real estate market shows signs of maturation as autumn arrives. The characteristics of the market are an increase in the number of listings, but at the same time demand is still comparable to last year and the first half of this year. We are moving into a market normalization phase where the schizophrenic times of quick decisions and fear of missing out are beginning to fade, and buyers and renters have the opportunity to take their time, choose, and make correspondingly smarter and more thoughtful decisions.

Looking at the numbers, the transaction volumes in recent years in the more expensive real estate segment are as follows:

House transactions in Tallinn and Harju County (priced 750,000+ €):

• 2019 – 9,
• 2020 – 7,
• 2021 – 32,
• 2022 (1st half) – 18.

Apartment transactions in Tallinn and Harju County (priced 500,000+ €):

• 2019 – 31,
• 2020 – 35,
• 2021 – 73,
• 2022 (1st half) – 85.

Buyers and renters are much more aware of their wishes and willing to pay a justified price.

Purchasing comfort and top quality

Buyers are mostly people permanently living in Estonia who want a home for themselves and their families that meets all their needs. Important aspects are location, project and layout, privacy, sufficient space for all family members, high construction quality with proper documentation, and quality and thoughtful interior design. Modern and sustainable technological solutions are becoming increasingly important, especially now.

While years ago "houses built for sale" had a slight negative undertone, now there have come onto the market residential properties that have been built with the same purpose, but in a very good location, with a good project and high construction quality. Interest is equally great both in houses that are completely finished and furnished, as well as in dwellings where interior design can be done entirely according to one's own taste.

As for apartments, demand is for larger penthouse-type living spaces. Of course, price here also reflects privacy, unique views offered by the top floors of high-rise buildings, good layout and conveniences such as garage parking and additional storage spaces. Likewise, modern and sustainable technological solutions are important for apartments.

The rental market seeks complete solutions

The rental-interested client has a slightly different profile than the buying client. Currently, quality real estate is being sought by foreign talent coming to work for Estonian IT companies, embassy employees, and our own local clients who, for example, have sold their existing real estate and are either searching for a new home or are in the process of building one.

Since a rental apartment is nevertheless a temporary solution and may not be so convenient for families, there is a desire to make this interim period as pleasant as possible and people are willing to pay somewhat more for it. Most clients are looking for fully furnished rental space that has everything needed for comfortable living, from kitchenware to interior design elements.

In terms of quality rental real estate, the supply of apartments is currently quite good, but poor for houses and parts of houses.

Houses are built specifically for rental purposes very rarely in Estonia. Typically, one's own homes are rented out when owners plan to move abroad from Estonia, but intend to return at some point. However, a problem can arise here in that one may not want pets in one's home or owners may have other wishes that may not align with the expectations of potential renters. At the same time, it can be said that in this market segment too we are moving in a direction where the number of listings is increasing and owners understand that the risks associated with renting out one's home can be mitigated with various insurance options and security deposits.

Number of listings and interested buyers grows

Therefore, it can be confidently said that in the premium-class real estate market, demand for both purchase and rental objects is still in a growth phase. Clients are aware and demanding, supply is increasing, and for the right and suitable house, apartment or property, a justified price is being paid.

The number of listings in this real estate segment is increasing year-on-year and more and more clients are emerging who can appreciate quality real estate.

LUXUM is dedicated to the sale of Estonia's most exclusive and unique real estate. Our 30 years of experience, real estate agents specializing in premium-class real estate, an extensive network of contacts and fresh market information give our clients the opportunity to find a suitable buyer or tenant for their real estate or to get the home they have dreamed of.

Article author: Lii Salusaar (Real estate agent at Uus Maa Luxum real estate office)