Realtor: Large Plots No Longer Sell Well

If during the 2000s boom the average buyer preferred very large residential plots, nowadays plots of 1000-2000 m² are selling the fastest. Since land is becoming increasingly expensive, it is expected that plots will become even smaller in the future.

"The Estonian real estate market has undergone significant changes over the last 20 years – while it was considered normal to purchase the largest possible residential plot during the boom period, nowadays buyers prefer compact and well-thought-out plots where location, privacy and reasonable maintenance costs form the best combination," says Martin Vendla, broker and board member of Uus Maa Pro.

For this reason, plots in the 1000-2000 m² range are selling the best, because according to Vendla, this size can accommodate a normal-sized house, a terrace and a children's play area without the total price and maintenance costs getting out of hand. Behind the market change, according to him, there are several parallel pressures. "Land prices have risen, construction costs are high and financing costs also put pressure on the buyer. At the same time, no one wants to live in a very dense environment. It is precisely for this reason that projects win where the developer has been able to plan good privacy and a quality living environment on a smaller plot," he says.

The search statistics of the Kinnisvara24 portal also show the popularity of reasonably-sized land parcels, says portal CEO Urmas Uibomäe. Approximately 30% of plot searchers set the size filter to 1000-2000 m². The most such plots are available in Harju County - 199. However, for example, eight years ago there were only 37 such large plots for sale, or rather larger land parcels were bought and sold.

Vendla currently considers two extremes the most difficult to sell. "With a plot that is too small, privacy suffers because the neighbor essentially lives behind the window. The buyer base for a very large plot of 3000–5000 m² is also quite small, because the price and maintenance scope grow quite substantially," he notes.

According to Vendla, today's new developments reflect the market well: for a row house a small courtyard area is offered, for a semi-detached house 500–1000 m² plot and for a single-family house usually 1200–2000 m² of land. "Developers have calculated through which size sells and which gives the best balance between price, building density and demand. This logic is not accidental," he added.

Currently there are 1260 plots for sale on the Kinnisvara24 portal, of which 33% are sized 1000-2000 m². Sales listings for such plots are active on average for 150 days, but for example plots over 3000 m² tend to have a longer sales period, notes Uibomäe. However, for example in Tartu and Pärnu counties, larger land parcels also sell quite quickly. Thus, in Tartu County the average size of a residential plot is 2555 and in Pärnu County 2641 m² and the sales listing is active for 122 and 152 days respectively.

Looking at the last 20 years, Vendla highlights a clear change. "During the 2000s boom, land ownership was valued and a plot had to be large. After the 2008 crisis, the buyer became more rational. Covid brought a temporary reversal – more space and a large home courtyard were desired, but rising euribor and construction prices brought the market quickly back to the pragmatic path."

For the coming years, Vendla predicts a deepening of the current trend. "Over the next five years, the market will move even more towards compact and well-thought-out plots. The key question is whether the developer can create such a living environment on a smaller area where people feel comfortable."