Realtor: The Best Time in Ida-Virumaa Real Estate Market Was During Corona

Although East Virumaa has been talked about as one of the most promising real estate regions, prices are currently falling and supply exceeds demand. However, in some areas there are still glimpses of hope, and the market revival that came with the end of summer gives reason for optimism going forward.

"Today's East Virumaa real estate market reminds us of the economic recession from nearly 20 years ago, when overheating of the market was followed by a decline," says Virge Tiirik, member of the board and broker at Northeast Real Estate. According to her, new and attractive properties continue to come onto the market, but there simply aren't buyers for them.

According to Tiirik, prices in the region began to rise initially during the coronavirus period, when people wanted to move away from larger cities and East Virumaa, and especially Kohtla-Järve's affordable apartment prices attracted even foreign students to buy property in the region. Transaction numbers began to grow again a few years ago, when there was much talk of support from the Just Transition Fund and new factories coming to the region, which in turn would create demand for more modern living spaces. This brought many investors to the region and prices went up. Today, however, many rental apartments stand empty. The last major blow to the region came when a drone crashed into the Narva power plant tower, which scared away potential buyers.

"Currently, apartments are being bought by those who need them for their own living. There are fewer investors and some investor groups have shifted from apartment business to the development of single-family and terraced houses, which have been in demand in the region for a long time," says Tiirik. According to him, the greatest demand is for first-floor apartments, the reason being mainly an aging population.

According to Urmas Uibomäe, CEO of the Kinnisvara24 portal, there are currently over 800 apartments for sale in East Virumaa. The most expensive of these is a 6-room apartment in a new development in Narva costing over half a million euros in Joaoru Residence. "However, if we look at apartment prices more broadly, compared to the beginning of the year, for example, 1-room apartment prices have fallen on average by 12% and the current average price is just under 12,000 euros. At the same time, however, prices for 2- and 4-room apartments have increased, by 2% and 8% respectively," says Uibomäe. While the most expensive apartment per square meter in Harju County is priced at over 11,000 euros, the most exclusive apartment in East Virumaa can be purchased for 3,435 euros per square meter. The cheapest price per square meter in East Virumaa is currently 21 euros.

Many houses and cottages are also for sale, according to Tiirik. "People have accumulated debts to the bank or are facing financial difficulties, and large or unfinished houses have been put up for sale. Unfortunately, there are no buyers for these either today, even though prices are significantly lower than, for example, two years ago."

According to her, this could also be due to the fact that the expectations of young families buying houses for living space have changed, and instead of large houses, modern houses are being sought. Such a house in the region costs an average of 250,000 euros, while houses built in the 1960s in the vicinity of cities are priced around 60,000 euros.

However, there are also positive developments in some areas. "In Narva-Jõesuu, the feared mass sell-off has not occurred and new developments are doing well, with buyers mainly being Narva residents, for whom the commute to work in Narva remains within a few tens of minutes. Also, interest in Sillamäe is growing again," says Tiirik. He also points to the Peipsi shoreline area, which thanks to the construction of a new spa has become attractive again and property prices have risen. Similarly, it is believed that a new factory planned for Kiviõli along with a hundred employees will stimulate the market.

Interest in the Peipsi shoreline area is also confirmed by Uibomäe. In addition, data from the portal shows that property seekers with quite different profiles and budgets are interested. "Both cheaper house and cottage options as well as newer dwellings, land plots and larger lakeside properties are being viewed," he says. For example, a lakeside property of approximately 2.9 hectares in Karjamaa village with a sale price of 580,000 euros was recently reserved, and a buyer was found for a residential plot slightly over 2,000 square meters in Kuru village priced at 18,000 euros. However, single-family houses have also been reserved with a price range of between 42,000 and 120,000 euros.