Big Real Estate Market Forecast: What Changes Do Property and Banking Experts Predict for the Coming Year?
Will the price gap between new developments and second-hand apartments continue to grow? Or will new developments become cheaper than they are now? Will commercial real estate make a comeback with the same momentum? Experts from Uus Maa, RE Kinnisvara, Reterra, Coop Bank, and Kinnisvara24 answer these questions.
"If it is normal for new development transactions to account for 20-25% of the total market, then currently that volume is 10-15% per month. The second-hand apartment market will likely continue at the same strong pace as the outgoing year, which is why the prices of second-hand assets will rise next year," believes Sten Renar Subatšus, analyst at Uus Maa. According to him, it is expected that second-hand market prices will rise closer to new development prices, which will make new developments attractive again after some time. He does not believe that new development sellers will start lowering prices.
"Large developers will probably not have to significantly lower new development prices, as they have changed their sales strategies and accounted for longer sales periods. However, more flexible offers can be obtained from smaller developers, for whom the downturn in new developments causes more pain," he says. However, for the entire apartment market, he predicts a 5-10% price increase by 2026.
Transaction activity will concentrate more in suburban areas next year. For example, he predicts greater activity in Lasnamäe and Mustamäe, where accordingly, stronger-than-average price increases are also expected.
Similar developments are expected beyond Tallinn in Tartu as well. However, other cities move behind the capital with some lag and more cautiously – both in terms of transaction activity and prices.
The smaller the square meters, the better they sell
Kaspar Markus, Head of Sales and Marketing at Reterra, does not believe that 2026 will bring price increases in new developments. "There is sufficient supply on the market. As long as there is sufficient supply for demand in each segment, there is also no pressure for price increases."
According to him, smaller apartments are more likely to sell. "If, for example, with a 3-room apartment you can choose between 60 or 70 square meters, then the smaller one is more likely to sell faster," he says.
The popularity of suburban developments will certainly continue, which on the one hand are more affordable, and at the same time the environment there is more family-friendly and all conveniences are within reach.
For owners of B-class buildings to fill spaces, but since vacancies and competition are greatest in this segment, significant efforts must still be made to attract tenants. "Greater activity is in the market for warehouse and production spaces as well as stock-office-type buildings, where volumes have also fallen compared to recent years, but there are still tenants on the market for whom new developments are being brought to market."
According to his estimate, the rental price for new office spaces will remain at around 19-21 euros per square meter next year. On the second-hand market, however, prices are falling, especially in older buildings located on the outskirts of Tallinn and in residential areas.
According to him, developers will have it harder, those who do not build a complete quarter, but only individual buildings. "In the new year, interest in comprehensively planned quarters will clearly grow on the new development market, where residential and commercial spaces, traffic, public space, and services form a well-thought-out whole," he explains. "The combination of residential and commercial spaces ensures that everything needed is within reach, while at the same time preserving the family-friendly and human-centered nature of the area."
A-class office space selection decreases
According to Andi Pleskovski, Senior Consultant and Partner at RE Kinnisvara, approximately 30,000 m2 of office space will be completed in Harju County in 2026. "This is the smallest new office space volume since 2014, or the lowest figure in 10 years. The limited selection stems from the fact that several years ago, many developers became very cautious due to the market's uncertain future outlook and decided not to start building new office buildings. Since, depending on the size and complexity of construction, large commercial buildings take 1.5-2 years to complete, we are today in a market situation where those seeking new office space have very limited choices in 2026," he says. The volume will grow somewhat in 2027 and 2028, but since these are larger buildings, it means that numerically few buildings will be completed and location choices in the capital will be very limited in the coming years.
The scarcity of new, or A-class office buildings gives Pleskovski the opportunity to raise rents to around 19-21 euros per square meter. On the second-hand market, however, prices are falling, especially in older buildings located on the outskirts of Tallinn and in residential areas.
Fear of hidden defects corrects listings
According to Kinnisvara24 CEO Urmas Uibomäe, it is expected that in 2026, the focus of the real estate market will be even more strongly on second-hand apartments. Particularly in demand are apartments up to 10 years old, where the quality is like-new, but the price is much more favorable. "These homes are mostly furnished, in good technical condition, and without the need to immediately make additional investments – which is why they are preferred over new developments, which are more expensive and often require additional furniture and furnishings to be purchased," explains Uibomäe. He too predicts that the price gap between second-hand and new developments will begin to narrow and, depending on the product group, real estate price growth will remain in the 5-10% range.
The quality and correctness of listings will become clearly more important next year, in his view. "Since most transactions will come from the second-hand market, buyers are very carefully monitoring the condition of the property and the information provided by the seller. Sellers are increasingly becoming aware that an insufficiently described apartment or hidden defects can later lead to disputes or transaction failure. Therefore, more attention is being paid to ensuring that listings are accurate, substantive, and reflect the actual condition of the property."
Bank: new apartments have started to be purchased more
According to Arko Kurtmann, Chairman of the Board of Coop Bank, the activity of the commercial real estate market in 2026 will largely depend on how much free capacity banks still have to finance real estate.
"Banks finance properties with cash flow, not speculative spaces. As long as there are vacant spaces in new office buildings, there is greater pressure on the vacancy and rental price of older buildings. Since 2026 will bring a vigorous influx of new office spaces to Tallinn, vacancies and rental prices will remain at the same level in the big picture," explains Kurtmann.
While commercial real estate is noticeably dependent on Euribor, residential real estate transactions are conducted regardless of, for example, Euribor or inflation, which has also been increasing home loan balances month after month.
"We see that over the past year, buyer preferences have changed. If previously we have mainly financed the purchase of new apartments, this year many buyers have preferred so-called like-new apartments, which are 3-7 years old," says Kurtmann. In the last quarter of 2025, according to him, the sale of new apartments has also picked up and the bank's financed stock of new developments has significantly decreased.
"For 2026, we predict an active year in terms of transactions. The price increase for apartments will be very moderate, as there is sufficient supply. The average statistical price per square meter will depend on the structure of transactions, i.e., whether more new or second-hand apartments are sold," explains Kurtmann.
