South Estonia Real Estate Market 2025: Tartu County Blooms, Other Counties Still Awaiting Spring

Kinnisvara24 portal and the latest statistics from the Land and Cadastre Board show that the first months of the year have revealed clear regional differences in the South Estonia real estate market – the number of apartment transactions in Tartu County increased by nearly a quarter, while smaller regions continue to experience depopulation and declining purchase interest.

In the first quarter of this year, the South Estonia real estate market has been influenced, as elsewhere, by the gradual decline in euribor, which has brought relief to home loan borrowers and improved overall purchasing power. This effect is particularly noticeable in larger cities, where the number of transactions has increased significantly.

"The decline in euribor has restored people's confidence and willingness to purchase new living space. This trend is most clearly visible in Tartu County, where the activity of apartment transactions has increased by nearly 24 percent," noted Kinnisvara24 CEO Urmas Uibomäe.

However, regional differences are notable. Apart from Tartu County, the only regions showing growth in transaction activity are Põlva County (+13.6%) and Viljandi County (+5.37%). Although the statistics showed significant growth percentages in Põlva and Viljandi counties, only six and five more transactions were actually completed in these counties respectively. At the same time, a decrease in the number of transactions is evident in Valga County (-12.12%), Võru County (-8.3%), and Jõgeva County (-5%).

"In smaller county centers, we see ongoing challenges – population decline and lower purchasing power affect real estate market activity there. A clear distinction is emerging between larger centers and peripheral areas," explained Uibomäe.

In the peripheral areas of South Estonia, the trend of residents moving away continues, which is why interest in real estate is considerably more modest than in Tartu County. In small towns, the most valuable transactions in 2024 remained largely in the 100,000–200,000 euro range.

The number of listings has grown explosively

One of the most striking trends is the significant increase in the number of sales listings in all counties of South Estonia. Compared to the first quarter of last year, the number of listings has increased the most in Jõgeva County (+131%) and Valga County (+85.4%), but growth is strong in Viljandi County (+75.3%), Võru County (+47.6%), and Põlva County (+41.6%). In Tartu County, where the number of transactions grew the most, the number of listings has increased by 25.9%.

"The sharp increase in listings shows that sellers have become more active, but it also indicates a longer sales period – especially in smaller regions, it takes more time than before to realize real estate," explained Uibomäe.

Listing prices are falling almost everywhere

Data from Kinnisvara24's new statistics environment show that apartment listing prices per square meter have fallen over the year for almost all apartment sizes and in all counties. For example, the listing prices of one-room apartments have fallen by 41.3% in Valga County, 27.5% in Jõgeva County, 25.6% in Viljandi County, and 19.9% in Tartu County. The only region showing growth is Põlva County, where the listing price per square meter of one-room apartments has increased by 49.7%.

"The decline in apartment listing prices shows that the market is correcting previously overvalued levels. Many sellers are forced to make their price expectations more realistic, especially in peripheral areas," said Uibomäe.

The number of rental apartments continues to grow

The number of rental listings has also increased this year in all counties except Jõgeva County. The increase in rental listings is particularly significant in Põlva and Valga counties, where the growth in both has been 150%. In Viljandi County (+78.8%), Võru County (+75%), and Tartu County (+62.4%), the number of rental listings has also increased substantially.

"The increase in rental market activity reflects, on one hand, investors' interest in rental real estate, and on the other hand, the low demand for rental space from local residents in smaller county centers," noted Uibomäe.

Apartments are rented primarily in cities. In South Estonia, this market is most active in Tartu, as the demand from students and young specialists for rental space is high. In South Estonia, the rental market also stands out in Viljandi and Otepää. The winter capital's characteristic feature is primarily short-term rental space (such as Airbnb), as the region attracts tourists both in winter and summer. This supports investments in holiday apartments. In other county centers, the rental market is limited, as demand is concentrated primarily on local residents. Younger people move to larger cities and the population decreases.

At the same time, the smaller counties of South Estonia stand out in terms of rental yield. Based on Kinnisvara24's rental yield calculator, the average rental yield of one-room apartments in Jõgeva reaches 15%, in Võru it is 9.2%, and in Põlva 10.5%. In Tartu, the same figure is only 5.7%.

"A renovated and properly furnished rental apartment can also be very sought after in the periphery, as many companies are looking for accommodation for specialists who come from outside," he noted. According to Uibomäe, when investing in rental apartments in small towns, one should account for greater risk – both population decline and low liquidity.

Future outlook

According to the CEO of Kinnisvara24, the polarization of the South Estonia real estate market will continue in 2025 – Tartu and Viljandi will remain active, while smaller centers face challenges.

"The Tartu region will remain the engine of the South Estonia real estate market thanks to the university and jobs. In other county centers, the viability of the real estate market largely depends on the performance of local employers and regional political measures that could slow depopulation," summarized Uibomäe.

According to real estate agents' estimates, Tartu may expect a moderate number of transactions and price growth of approximately 3-5% this year. In other South Estonia cities, price growth is more moderate or remains at the same level. Demand is primarily for energy-efficient apartments and new developments.

Average sale and rental prices and rental yield of apartments in Q1 2025

Source: Kinnisvara24 new statistics environment and rental yield calculator