Monthly Overview: Average Price per Square Meter Jumped to 3,140 Euros Before VAT Increase

Before the VAT increase, a total of 934 real estate transactions were completed in Tallinn in June, and the average price per square meter of apartments rose to 3,140 euros, which is a record for the past year, commented 1Partner Real Estate analyst Elia Vääri.

Last month, 741 apartments were sold in Tallinn, which is over 25% more than in June of last year. "The VAT increase that came into effect yesterday prompted some new home buyers to act at the last moment, which is clearly indicated by both the growth in the number of transactions and the increase in the average price per square meter," said Elia Vääri, but emphasized at the same time that the two-percent price increase that was approaching did not bring any extraordinary buying boom to Tallinn's apartment market as predicted.

The average price per square meter of apartments was 3,140 euros in June (2,944€ in May) and the median price was 2,941 euros per square meter (2,734€ in May), and the growth was driven by the concentration of buying interest in new developments. "The VAT increase directly affects only the final price of new apartments, which is why the buyers and developers of these apartments wanted to complete transactions before the tax rate increase. Since the price per square meter of new developments is higher than apartments on the secondary market, the average price also increased, which will likely adjust slightly downward again in the coming months," explained 1Partner's analyst.

The most expensive apartment sold in Tallinn for 1,873,600 euros. The total value of real estate transactions increased by almost one-fifth year-over-year, reaching 175 million euros in June. In addition to apartments, 21 developed residential land properties and 7 residential land plots were sold in the capital last month, with the most expensive property changing hands for 1,387,140 euros.