Premium-class rental apartments – a new trend in the real estate market

High-earning foreigners who have come to work in Estonia have increased demand for premium-class rental properties – according to real estate specialists, fully furnished rental spaces where everything needed for living is already provided are being sought.

„High-quality standard, or premium-class rental properties are primarily sought by foreigners living in Estonia temporarily for work over a few years and for whom it doesn't make sense to buy property," explained Lii Salusaar, a real estate agent at Uus Maa Luxum who specializes in premium-class properties. While high-earning Estonian people prefer to buy themselves a home, it is primarily foreign talents working in, for example, Estonian IT companies, embassies and elsewhere who want to rent luxury apartments or houses. „These are people who don't plan to move to Estonia for a longer period, but who don't want to compromise on quality of life. They are willing to pay a higher rent for comfort and quality."

According to Salusaar, what makes premium-class rental properties special is not only the price, but offering the tenant an experience equivalent to a 5-star hotel. „You only need to bring personal items like clothes and a toothbrush. Furniture, appliances and everything else needed for living, even towels and bed linen, are already provided in such a luxury apartment. Often, premium-class properties also have a unique location, quality construction, refined materials and interior design, well-thought-out architectural solutions and all sorts of additional amenities such as privacy, storage spaces, terrace, garage, sauna, electric car charging point, etc."

According to Urmas Uibomäe, CEO of the portal Kinnisvara24, demand for premium-class rental properties has grown in recent years as more foreign specialists have moved here for work. „Estonian people see rental housing more as an affordable solution, where young people move who are not yet able to buy a home, or it is seen as a temporary solution where people move while their home is being completed. For such rental housing, a low price and convenient location are sought rather more. Quality materials or designer furniture are usually not a priority for young people."

According to Uibomäe, there are people willing to pay more for rental housing, but demand for luxury goods is never mass. „Although demand for quality rental properties has increased due to foreign IT specialists working here, and as a new trend we can see new luxury rental apartment offerings, it can be assumed that this will remain a niche product. Estonian people still buy themselves a home when they can afford it," assessed Urmas Uibomäe.

Lii Salusaar also confirmed that there are currently more premium-class apartment and house offerings on the rental market than demand. „The increase in the number of offerings is due to the completion of new larger new developments. Wealthier people have invested their money in real estate and are trying to make their apartments earn money. To stand out on the rental market, more effort is also put into interior design. Clients who are willing to pay a high rent for a quality home can choose between several alternative offerings."

Salusaar pointed out that for such rental apartments, the presence of an additional room is preferred. „Many people continue to work partially remotely even after the end of the pandemic and prefer an apartment where there is a separate quiet room for this. Those who looked for a two-room apartment before the pandemic are now looking at three-room apartments."

Premium-class property examples:

Three-room design apartment in Kalamaja: https://kinnisvara24.ee/korter-yyr-tallinn/240457074

Luxury apartment with Old Town panoramic view in Tallinn city center: https://kinnisvara24.ee/korter-yyr-tallinn/240599218

Furnished house in Peeter: https://kinnisvara24.ee/maja-yyr-rae-vald/240605462