Real Estate Agent: Tallinn Property Is Luxury

For years, Tallinn real estate has received increasing attention, which according to critics is becoming less and less accessible to many people. This may sound provocative, but real estate in the capital is indeed a luxury, and we are moving in the same direction as the rest of Europe, says ELUM Real Estate broker Egon Juhanson.

The rapid price increases in Tallinn real estate and deteriorating accessibility deepened from 2021 onwards, when an investment boom was underway. Banks issuing residential loans also pointed to this at the time.

Purchasing power has deteriorated significantly compared to 2021/2022, as prices are essentially the same, but Euribor is at approximately 2% instead of zero, and the general cost of living has also increased considerably.

„For example, with a net salary of 3,000 euros, you can get approximately 150,000 € in loans, to which you need to add approximately 20% of your own financing," Juhanson explains. „If you look at the average salary, we have very few such buyers. Fortunately, banks also count two salaries under one household, but this is of course only possible for those who don't live alone. People are also in a better position if they have something to sell, as this helps increase the own financing portion and reduces the monthly loan payment."

According to Juhanson, we are moving in the same direction as the rest of the developed world. This means that increasingly, people rent their homes rather than buy them. Estonians do believe in real estate, but it is inevitable that these changes will eventually happen here too. „Renting has become easier and more professional, and rental buildings built by developers are becoming increasingly important," he adds.

Likewise, suburbanization continues. This is also a process similar to the rest of the world, one of the reasons being the expensive real estate in the city. Successful development activities in the municipalities near Tallinn and Tartu describe this well.

A home away from the city center is the most accessible property for the middle-class family in terms of purchase, and the share of suburban real estate in the transaction market is growing. „Therefore, I recommend that developers pay even more attention to these directions. The buyer pool in Tallinn won't disappear, but considering price levels and opportunities, suburban property is experiencing increasingly high demand," predicts Egon Juhanson.