Comparison of Resort Town Rental Markets: Kuressaare Surprises with Growth, Pärnu and Haapsalu in Decline

Estonia's most popular resort towns show different rental market developments – Kuressaare's rental market is the only one in a growth trend, while Pärnu and Haapsalu are experiencing decline, according to Kinnisvara24 statistics.

Although resort town rental markets generally show similar trends – such as strong seasonal influences – one town has pulled ahead of the others in rental yields.

"Islanders are outpacing the mainland," noted Kinnisvara24 CEO Urmas Uibomäe. "Over the past year, Kuressaare's rental yields have increased by 1.76 percent, while in Haapsalu they fell by 0.87 and in Pärnu by 0.54 percent. Equally notable is the average rental price: while in Haapsalu it dropped by 122 euros over the year and in Pärnu by 46 euros, in Kuressaare it actually increased by 10 euros," he described the Kinnisvara24 statistics environment indicators.

The number of offers, on the other hand, has increased in all three towns: in Pärnu 1.8 times and in Kuressaare and Haapsalu even threefold.

* The table compared data as of May 2024 and 2025.

What is behind Kuressaare's rising rental prices? According to Pindi Kinnisvara broker Janar Vaima, the reason is market stabilization on Saaremaa.

"In Kuressaare as a tourist town, there are many apartments that owners don't use themselves and that are rented out short-term in the summer. Last year, the number of tourists was unexpectedly small and therefore some of these apartments moved to the long-term rental market," explained Vaima Kuressaare's special characteristics, noting that the market has stabilized for 2025. "Lending conditions are favorable again and interest in real estate purchases has grown. If there are no drastic changes in the economy, no major fluctuations are expected on the rental market in the near term," he added.

Season dictates conditions

Urmas Uibomäe noted that all three resort towns' rental markets are characterized by strong seasonality: in spring, many apartments move from the long-term rental market to the short-term market to serve summer visitors.

Broker assessments confirm this. "During the summer season, the majority of tenants in Pärnu are people from outside the city, including foreigners. In the fall, students are added," described Mai Kõvatomas, a Pindi real estate broker operating in Pärnu, the local situation.

In Haapsalu, seasonality is even more clearly outlined. "During the summer months, typical tenants are city visitors – vacationers and festival attendees. Throughout the rest of the year, apartments are rented primarily by local residents or people who have temporarily come to Haapsalu for work," noted Ätli Altosaar, a local Pindi real estate expert.

Haapsalu residents are more price-sensitive

However, some interesting differences emerged in the profiles and preferences of resort town tenants: for example, Haapsalu renters are more price-sensitive than in other resort towns.

"When it comes to rental properties, it doesn't matter whether the apartment has been recently renovated or is simply in good condition – what matters is that the living space maintenance costs and rent are affordable," explained Altosaar.

Pärnu's peculiarity has recently become the importance of parking opportunities. "Changes in Pärnu city's parking regulations have meant that free parking has become a decisive criterion for many tenants," acknowledged Kõvatomas.

Location and quality determine price

In all three towns, the city center is valued as a location for rental spaces, where services and leisure opportunities are within walking distance.

"In Pärnu, the more attractive areas are the City Center and Beach District, both because of proximity to the beach and entertainment venues as well as schools and universities," gave Kõvatomas as an example.

Although city center areas remain in demand, it becomes apparent even in small towns that apartment quality matters more than location, noted Kinnisvara24 CEO, and stated that people are willing to make concessions on location for this. "Increasingly, apartments in good condition and comfortable are being valued. Apartments with tiled stove heating are becoming history," said Uibomäe.

This is particularly evident from Pärnu's example, as seen from Mai Kõvatomas's experience.

"Increasingly, apartments with central heating and in very good condition are valued, even though apartments with tiled stove heating may have lower maintenance costs and apartments in poor condition may have lower rent," noted the broker.