Real Estate Expert's Forecast
Real estate expert's forecast: the economy is headed upward next year and Tallinn apartment prices may also rise.
According to Martin Vahter, CEO of 1Partner Real Estate, next year should be relatively good for the real estate market in Tallinn and Harju County – the vaccine offers hope for general economic improvement, and at least the prices of apartments in the capital may even see a slight increase.
According to Martin Vahter, crises are different, and next year should not expect a perfect storm similar to the late 2000s in the real estate sector.
"With vaccine hopes, general expectations are also up. Emotions affect purchasing behavior and the economy right now more than actual numbers, which is why next year should be relatively good and prices in Tallinn may even rise. Apart from a couple of larger cities, the situation is rather the opposite elsewhere in Estonia due to general urbanization," said Vahter.
"If no drastic health crisis emerges in the meantime, economic recovery will begin, and even if it takes a couple of years, expectations are rather positive. If you look at the behavior of residential property buyers over the last three months, there is no corona effect felt in the capital. Consumer spending is strong, people actually have money," said the 1Partner CEO.
Developers applied the brakes and selection shrinks
According to Martin Vahter, one should expect a certain increase in unemployment and bankruptcies, but both indicators are reaching everyday life rather at a slower pace, and so far thankfully no major jump has been felt. "The economy is reorienting itself and people will eventually find themselves a new job anyway. Before the coronavirus crisis, we still had a labor shortage," said Vahter.
"Payment holidays offered by banks in the spring are either already over or are coming to an end, but there will be no house repossessions like with the previous crisis. This is also not in the banks' interest. People will likely remain in debt more, but rather for rent or small loans; banks will be owed money only as a last resort," said Vahter.
"In the spring, many real estate developers applied the brakes and some are still in a wait-and-see position, which is why fewer new homes will be completed next year. The number of Tallinn residents is growing, demand is the same, but the selection is smaller. Those developers who continued with the same momentum in the spring are now in a good position, because restarting takes time for others," said Vahter.
Additional information:
Martin Vahter CEO of 1Partner Real Estate Mob: 51 32 543 [email protected]
Article author: Martin Vahter, CEO of 1Partner Real Estate
