The Gap Yawns Between Apartment Offer and Transaction Prices
Kinnisvara24's apartment price statistics show that the gap between transaction prices and asking prices remains very large. In the second quarter, the gap decreased slightly, falling from 31.4% in March to 28.9% in June.
Last month, the Land Board announced that the real estate price index, which is based on transaction prices, set a new record. The index grew 1.7 percent in quarterly comparison and 19 percent year-on-year. Kinnisvara24 compared the growth of residential transaction prices with asking prices. It turned out that while apartment transaction prices in Estonia as a whole grew 2% in the 2nd quarter, apartment asking prices fell 1.6%.
Source: Land Board, Kinnisvara24.ee.
"The real estate market is active, with both the number of transactions and average prices growing consistently for a long time. It is quite natural that in such a market, it doesn't make sense for a property seller to put an average-sized price tag on their property immediately upon posting an announcement. To make the right pricing decision, it is wise to have your apartment professionally appraised before posting the announcement and, if possible, also consult with a real estate agent on determining an appropriate asking price. Too high an asking price means immediate exclusion of some interested parties, while too low a price leaves less room for negotiation," commented Kinnisvara24.ee CEO Paavo Heil.
"For an apartment buyer, the difference between asking and transaction prices essentially defines the limits of negotiation room. Certainly, you can't get a third off the price everywhere. Usually, there is greater negotiating potential with less liquid properties, those located farther from city centers, and also with secondary market apartments. Asking prices for apartments in Tallinn and Harju County are currently on average 20% higher than transaction prices. However, the differences between asking and transaction prices for new apartments are even smaller," Heil added.
Kinnisvara24's analysis of asking prices is based on the asking prices that were in effect at the time of initial publication of 3,566 new apartment sales announcements posted in June and March 2018.
Browse various apartment sale offers here >>
