Study: Real Estate Experts Believe Inventory of New Apartments in Tallinn Will Grow Further
According to real estate experts, the number of free apartments for sale in Tallinn's new developments will increase even further next year, as revealed by a survey conducted under the leadership of 1Partner Real Estate, in which 122 real estate professionals participated.
Two-thirds of the real estate experts who participated in the survey believe that the inventory of new apartments will grow next year. "A process where significantly more is built than sold over a certain period of time leads to oversupply. In order to assess the situation, we also need to understand the causes behind it," comments Elia Vääri, analyst at 1Partner Real Estate, on the perspective of the new developments market.
According to 1Partner Real Estate's analyst, the main reason for new homes being completed at a rapid pace is efficiency. "By building more at once, developers are attempting a double effect simultaneously - gaining price advantages both from the volume effect and from preventing price increases resulting from inflation," comments Vääri and adds that this is how they manage to keep final prices at relatively the same level for some time now.
According to Elia Vääri, the growing inventory in today's manner is not in itself a crisis signal, but rather first and foremost confirmation of the strength and sufficient capitalization of local developers. "We would certainly have a problem if there were no transactions on the market. At the same time, the number of transactions has remained stable over the past year and the market is active. Not as active as in peak times, but still completely functioning," notes Vääri and adds at the same time that production cannot continue in this manner on the shelf for a very long time.
"Input prices in the construction sector continue to move upward and every new project will certainly be more costly for the developer in the future. As long as the selling price has not started to rise, it is a good time for buyers, because there is increasingly more choice, incomes are rising and the interest rate environment is stable," says Elia Vääri.
