Monthly Review: Tallinn Apartment Square Meter Price Set Record for Second Month in a Row

Monthly Overview: Tallinn Apartment Square Meter Price Sets Record for Second Month in a Row

In July, a square meter of an apartment in Tallinn cost an average of 2,333 euros, which is 17 percent more than the same period last year, according to an analysis of Land Board statistics by the Baltic region's largest real estate company 1Partner.

According to Martin Vahter, head of 1Partner Real Estate, real estate prices are currently rising almost everywhere in the Western world. "Tallinn's 17-percent price increase is one of the fastest in the past decade," said Vahter.

"Behind the price increase is, on one hand, rapid economic growth and rising wages, and on the other hand, rising construction costs. Additionally, general uncertainty on the coronavirus front affects the market, which is prompting people to invest their funds in tangible assets," added Vahter.

"Since prices are high, there is not much haggling. However, the price increase makes it difficult for many to buy their own home in the near term, and they must look toward the rental market," said Vahter.

"When the availability of building materials stabilizes and the future becomes clearer, price increases should also slow down. It is also clear that prices cannot rise indefinitely, because at some point there will be no more buyers," added Vahter.

In July, a total of 1,029 real estate purchase and sale transactions were conducted in Tallinn, which is 1.2 percent less than in June, but 17 percent more than the same month last year.

In July, 751 apartments were sold in Tallinn, which is 4.6 percent less than in June. "The decrease in the number of transactions is entirely expected. In July, transaction activity returned to the level typical of summer months, when the number of purchase and sale transactions remains in the range of 700-800," commented Vahter. The average square meter price of an apartment rose 1.2 percent over the month to 2,333 euros. The most expensive apartment in the capital sold for 935,000 euros.

In July, 35 residential land properties were sold in Tallinn, which is nine fewer than in the previous month. The most expensive detached house sold for 840,000 euros.

Last month, 16 residential land plots were sold, which is five more compared to June. The most expensive plot cost 864,000 euros.

Source: Martin Vahter 1Partner Real Estate Managing Director