Real Estate Expert: Interest Rate Rise Has Not Significantly Affected the Cottage Market
According to Ketlin Jundas, a professional broker at Estonia's largest real estate office Uus Maa, demand for summer cottages remains very high in areas near Tallinn despite uncertain times.
According to Ketlin Jundas, the spring season for summer cottage sales has clearly begun, and in the most popular locations demand is high and transactions are completed rather quickly when the price is right. "The most popular is the northern coast – old fishing villages and summer cottage areas where demand exceeds supply. The rise in interest rates hasn't affected the summer cottage market much, because many purchases are made with personal funds," said Jundas.
"Also, West Harju Parish is very popular – Vääna-Jõesuu, Laulasmaa, Türisalu and Klooga. Many buyers are young people who want to escape the city for the summer, and this is supported by the continued allowance of home offices. Maintaining one's own garden plot is also becoming popular among young people again," said Jundas.
"Currently, the most sought-after are well-preserved summer cottages from the 1970s, for example, classic A-shaped houses renovated for year-round living or simply well-preserved buildings that can be fixed up. The prices of less valuable houses have rather fallen, because they need to be demolished and replaced with new ones, but the construction cost for that is high. In popular areas and for valuable houses, prices have remained at the same level or have even risen slightly. For example, a classic summer cottage on the northern coast costs between 75,000 and 95,000 euros," said Jundas. Cheaper ones, which are found a bit further towards Laitse and Kibuna in West Harju Parish, cost around 50,000 euros.
"The summer cottage market is highly seasonal, which means that warm weather invites people to view summer cottages and also to act more quickly. Although good deals come even in winter, now is the right time to put your summer cottage on the market. In the second half of summer, it may happen that you fall behind on the season and your summer cottage has to be left idle for the winter. If the seller doesn't have the desire and motivation to deal with the summer cottage anymore, then such a delay and winter weather conditions don't guarantee that in the new season you can get a higher or the same price, because the building needs care and maintenance even in winter," added Jundas.
According to Ketlin Jundas, the prices of residential houses fell somewhat less in the last half-year compared to apartments. "It was evident that house prices were being maintained, and in the interest of transaction speed, sellers were willing to make price concessions only slightly. The residential house market has also become clearly more active in spring. Well-planned quality houses are still being purchased. Near Tallinn – in Viimsi, Kakumäe, Tiskre and Peetri there is greater purchasing interest in houses costing up to 600,000 euros," added Jundas.
