Real Estate Expert: Apartment Rental Prices Rose 20% in a Month and Queues Are Extremely Long
According to Jaanus Laugus, the head of Estonia's largest real estate bureau Uus Maa, rental prices for lower-end apartments have risen by approximately 15-20 percent in a month in Tallinn and other larger cities due to demand stemming from war refugees.
According to Jaanus Laugus, demand has grown most for more affordable and residential apartments. "The rental market is currently extremely active. For example, a waiting list for a typical three-room rental apartment costing 500 euros per month was joined by 40 people in a single day. Real estate agents have their own contacts and many apartments don't even reach public listings," said Laugus.
"The rental prices of newly available apartments have risen by 15-20 percent in a month, and apartments that previously cost 500 euros are now asking 600. Finding free and suitable space below 400-500 euros is already difficult in Tallinn, for example. The price increase hasn't yet reached previously available apartments, as the market hasn't settled enough and price level changes haven't yet formed. Also, the price increase hasn't affected the rental market for quite expensive apartments, as demand for them hasn't grown as much," added Laugus.
"If a person wants to come to Tallinn for work or to live, finding a place to live is currently quite difficult. For ordinary people, this means that city boundaries are expanding and people are moving further away from the center to afford more suitable and accessible living space. Keila, Rapla, Kehra and generally places with good train or road connections like Paide and Rakvere are already expensive and this is certainly an upward trend. The rapid urbanization that has been happening so far will slow down and life will spread out a bit more again," added Laugus.
"After suburban sprawl, Estonia will likely also see another trend known from large cities, where, similar to the "Friends" series, adult people share an apartment and each has, for example, one room. Owning your own apartment in the city center is gradually becoming more of a luxury item," said Laugus.
"Besides rental apartment owners, hostels are doing better than ever before, which were on the brink of bankruptcy throughout the entire corona period, but now are completely full and prices have increased several times over. The state will likely create some longer-term accommodation options for refugees, whether in the form of social or rental housing in addition, to place people somewhere. There are also business opportunities here for entrepreneurs – to offer affordable accommodation solutions, for example by renting large private houses room by room or by converting older buildings into communal housing," added the head of Uus Maa.
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