Kaamos Real Estate: Real Estate Market Gains Momentum

Kaamos Real Estate rose to the top three of Latvia's most successful real estate developers last year based on the number of apartments sold and revenue. Estonian market figures also show growth, which provides confidence that the economy in the region as a whole has begun to show signs of improvement.

"Despite difficult market conditions, Kaamos has managed to strengthen its position in Latvia last year, and in our home market of Estonia, the beginning of the year has shown a trend of improvement, which gives us reason to hope that the real estate sector and the economy as a whole in this region has overcome the more difficult times," says Kaamos Real Estate CEO Taimo Murer.

The Latvian real estate market shows signs of stabilization

Kaamos's Latvian development projects made it to the list of the most popular new developments last year: Moho Park located in Mežapaks achieved 3rd place, and Ābeļziedu Terases in Teikas ranked 6th. Kaamos also ranked third in Latvia in terms of sales turnover comparison last year.

According to Colliers Baltic, the number of apartments completed in Latvia in 2024 decreased by 35% compared to the previous year, but the market's low point has likely already been passed. Although at first glance it may seem there are many unsold apartments on the market, in quality projects their share is small and interest in them remains high.

Parallels with the Estonian market

While the Latvian real estate market shows signs of stabilization, the Estonian market has also picked up activity, though the dynamics are somewhat different. According to Citify, Tallinn's supply of new apartments in February was at the level of 2,615 apartments, which is 16% more than a year ago. Sales added 233 new apartments in February, while net sales were 166 apartments, which makes the last 12-month average 111 new apartments per month. The average price of apartments in February was €4,958/m², which is 5% more than a year ago.

Looking at Land Board data for Tallinn's secondary market and new development apartment transactions, 696 transactions were made in February, which is 13.7% more than a year earlier. For Estonia as a whole, in February there were 1,510 apartment transactions, which is essentially at the same level as a year ago, when 1,499 transactions were made.

Future market development and price trends

In both Estonia and Latvia, developers have adapted to new market conditions. On the Latvian market, the price level remained stable in 2024, but with a decrease in discounts and special offers, a price increase is expected. On the Estonian market, Tallinn apartment prices have grown slightly, but market activity continues to depend on the European Central Bank's interest rate policy and consumer confidence. We certainly believe that activity in Estonia will remain in the first half of the year, as homebuyers want to prevent price increases that will accompany the VAT changes taking effect from June 1st.

Kaamos Real Estate CEO Taimo Murer emphasizes that Estonian and Latvian markets have similar trends. "The market is changing and the most attentive homebuyers have already noticed this. Last year, the average price per square meter in Estonia was €4,338/m², while in Latvia it remained in the range of €2,600–2,780/m². While the price level in Estonia is more stable, in Latvia we can predict an increase in prices due to the decrease in campaign discounts."

In general, both the Estonian and Latvian real estate markets are moving towards stabilization given the overall economic environment, and a decrease in supply and an increase in buying interest may lead to further price growth. Taking into account the improving economic situation, Kaamos plans to launch new residential development projects in both the Tallinn and Riga markets this year as well.