Realtor: Multi-million euro penthouses are increasingly becoming first-time buyers' first real home

If five years ago the typical buyer of Tallinn's luxury penthouses was a top executive in their golden years, today they are also being purchased by younger specialists in the IT and finance sectors, for whom this is their first home.

"Previously, you could say the buyer was middle-aged, a traditional large company owner. Today there are several different segments on the market, and one of them is new money – the younger generation of IT and finance sector professionals," says UUS MAA real estate bureau consultant Annika Leet.

According to Leet, these buyers reach luxury real estate without the classical development path, where one gradually moves from a smaller home to a larger one. A penthouse is often their first home altogether. "For them, the purchase is not about status, but about lifestyle. They want a vibrant urban environment, a smart home, energy efficiency, and large terraces," she adds.

However, the experienced luxury real estate buyer has not disappeared from the market. These are usually middle-aged entrepreneurs and top executives whose children have moved out of their parents' home and who therefore want to sell their estates in Pirita, Viimsi, or Kakumäe. "Often they also own a home in sunnier countries, so maintaining an estate in Estonia has lost its appeal. For them, a penthouse is a logical replacement for an estate," explains Leet.

A similar trend is confirmed by Fund Construction CEO Reigo Marosov, who is building Al Mare Torne. Both he and Leet say that the penthouse market is dominated by local buyers.

"Foreigners have become significantly fewer. An exception might be executives and specialists working in technology companies who have decided to tie their next 5-7 years to Estonia," explains Marosov.

According to Kinnisvara24 CEO Urmas Uibomäe, the portal's current offerings show that in the case of premium-class apartments, the buyer has an increasingly wide choice of amenities that have traditionally been associated with detached houses.

"New developments have brought to the Estonian apartment market an understanding familiar from the world's major cities – that living in an apartment does not necessarily mean compromising on comfort. With penthouses and other more exclusive apartments, we see offerings of large terraces and roof terraces, spacious views, floor-to-ceiling windows, and higher ceilings in the listings. Additionally, cooling systems, saunas or fireplaces, walk-in closets, multiple bathrooms, and parking and storage options are provided. In essence, one can enjoy many amenities in an apartment that we have become accustomed to associating with a luxury villa," says Uibomäe.

The penthouse buyer wants the apartment to have high ceilings, large and private terraces, and a nice view. Often, they also want the lift to go directly into the apartment, for the apartment to be soundproof, and for ventilation noise not to disturb sleep. The most exclusive wishes are related to the buyer's hobbies. In Leet's practice, apartments have been fitted with art storage with museum-standard climate control and a wine cellar with a tasting area for entertaining guests and sommeliers. There is also a desire for a wide parking space where an electric car can be charged, and spacious storage for sports and hobby equipment.

Buyers are willing to pay up to 12,000 euros per square meter for these possibilities. According to Leet and Marosov, such a price is not unbelievable at all, as a penthouse square meter is 30 to 100 percent more expensive than a regular apartment in the same building.

Leet's most expensive penthouse transaction exceeded the two million euro mark. The apartment was on the public market for about six months, which she considers quick for such property. Since penthouses are rather a deficit on the Estonian market, they are usually booked first and often do not reach public sale, notes Marosov.

Looking at the offerings on Kinnisvara24.ee, penthouses and more exclusive top-floor apartments are concentrated mainly in Tallinn and Harju County, but individual offerings can be found elsewhere in Estonia.

"The price range is very wide. Offerings start from a few hundred thousand euros, while the prices of larger and more exclusive penthouses reach 700,000 euros and beyond. The price is influenced by location, apartment size, views, the presence and size of a terrace or balcony, and the additional amenities offered by the building and apartment," says Uibomäe.