Interest in Real Estate Has Skyrocketed

On the Kinnisvara24 portal, the number of inquiries has grown by half in one month, with land sale offers attracting the most interest among Estonians, being searched for over 3 times more frequently than before.

Fresh statistics from the Kinnisvara24 portal show that compared to February, 50% more inquiries were made through the portal in March. Inquiries increased across all product groups, with the largest increases in land (+338%) and commercial space (+81%) sales offers and new development offers (+214%).

According to the portal's managing director Urmas Uibomäe, the growth in inquiry numbers reflects an increase in real estate market activity. "Real estate buyers are slowly regaining confidence in the market. Additionally, in conditions of high inflation, people are seeking places to store their money, and this is still being directed largely to the real estate market," added Uibomäe.

City Property real estate broker Gert Roosimägi also confirms that the number of people viewing properties and transactions has increased significantly in the second half of the first quarter. "Whereas previously people were rather fearful and cautious due to rising euribor rates, today people have slowly begun to adapt to the situation and the market has stabilized. Prices have also corrected, wage growth continues at a rapid pace, and the labor market has relatively strong footing despite the economic downturn," he added.

Compared to the last quarter of the previous year, the expectations between buyers and sellers at the beginning of this year have become significantly more balanced. "Whereas at the end of last year buyers were cautious and sellers were reluctant to lower prices, in spring the situation has stabilized and more interested buyers and home seekers have entered the market," said Roosimägi.

Portal statistics show that the most sought-after properties are affordable 2-room apartments that need renovation. According to Uibomäe, these are typically the main preference of real estate investors operating in the market. "Real estate investors are constantly waiting for good offers, and since sellers have made price corrections in the market, spring could be a good time to find an interesting project on the portal," he added.

According to City Property real estate broker Marilin Urva, secondary market apartments are sought mainly in the Mustamäe, Õismäe and Lasnamäe areas, and their prices have fallen approximately 8-10% compared to the last quarter of the previous year. "Prices typically fall on buildings that have not been renovated. However, apartment buildings that have had their facades repaired, plumbing and roofs replaced, and heating systems made more energy-efficient tend to maintain their value," added Urva.

Interest in new developments has also doubled, which according to Uibomäe may be related to bank and developer campaigns aimed at mitigating the increased risks associated with euribor. Additionally, banks are offering better than average market terms when purchasing A-energy class apartments.

However, since developers are not currently beginning construction of new projects, no new developments and consequently no new rental apartments are coming to market, so in Roosimägi's assessment there is a risk that rental real estate prices may start to rise this year.