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 resale apartments continue to widen? Or will new developments become cheaper than they are today? Will commercial real estate continue to expand at the same pace? These questions are answered by experts from Uus Maa, RE Kinnisvara, Reterra, Coop Bank and Kinnisvara24.
“Where it is normally typical for transactions in new developments to account for 20–25% of the total market, that share is currently only 10–15% per month. The resale apartment market will likely continue at the same strong pace as in the outgoing year, which means that prices of resale properties will rise next year,” believes Sten Renar Subatšus, Head of Analysis at Uus Maa. According to him, resale prices are expected to move closer to those of new developments, which will eventually make new developments attractive again. He does not strongly believe that sellers of new developments will start cutting prices.
“Large developers are unlikely to significantly reduce prices for new developments, as they have adjusted their sales strategies and accounted for longer sales periods. However, more flexible offers may come from smaller developers, for whom the downturn in new developments is more painful,” he explains. Overall, he forecasts a 5–10% price increase across the entire apartment market in 2026.
Transaction activity is expected to concentrate more in suburban areas next year. For example, he predicts higher activity in Lasnamäe and Mustamäe, where prices are therefore also expected to rise faster than average. According to him, similar developments can be expected not only in Tallinn but also in Tartu. Other cities, however, tend to follow the capital with some delay and more cautiously, both in terms of transaction activity and prices.
The fewer square meters, the better it sells
Reterra’s Sales and Marketing Manager Kaspar Markus does not believe that 2026 will bring price increases in new developments. “There is sufficient supply on the market. As long as there is enough supply to meet demand in every segment, there is no pressure for prices to rise.”
According to him, smaller apartments sell better. “If, for example, a three-room apartment is available in either 60 or 70 square meters, the smaller one will usually sell faster,” he says.
The popularity of developments on the outskirts of cities will certainly continue, as they are more affordable on the one hand, and on the other offer a more family-friendly environment with all amenities close at hand.
In his assessment, it will become more difficult for developers who do not create a comprehensive residential quarter but instead build only individual buildings. “In the new year, interest in the new development market will clearly grow toward comprehensively planned districts, where residential and commercial spaces, transport, public areas 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 preserving the family-friendly and human-centered nature of the area.”
Supply of A-class office space is shrinking
According to Andi Pleskovski, Senior Consultant and Partner at RE Kinnisvara, around 30,000 m² of office space will be completed in Harju County in 2026. “This is the smallest volume of new office space since 2014 — the lowest level in 10 years. The limited supply is due to the fact that many developers became very cautious a couple of years ago because of uncertain market prospects and decided not to start new office projects. Since the completion time for large commercial buildings is 1.5–2 years depending on size and complexity, we now find ourselves in a situation where the choice for those seeking new office space in 2026 is very limited,” he explains.
According to him, volumes will increase somewhat in 2027 and 2028, but since these are larger buildings, the number of completed buildings will still be small, and location options in the capital will remain very limited in the coming years.
The scarcity of new, or A-class, office buildings creates opportunities for owners of B-class buildings to fill their spaces, but since vacancy rates and competition are highest in this segment, significant efforts will still be required to attract tenants. “There is greater activity in the market for warehouse and production space as well as stock-office-type buildings, where volumes have also declined compared to recent years, but there are still tenants on the market for whom new developments are being brought forward.”
He estimates that rental prices for new office space next year will remain at around €19–21 per square meter. In the resale market, however, prices will fall, especially in older buildings located on the outskirts of Tallinn and in residential districts.
Fear of hidden defects is correcting listings
According to Urmas Uibomäe, CEO of Kinnisvara24, the focus of the real estate market in 2026 will shift even more strongly toward resale apartments. Particularly in demand are apartments up to 10 years old, where the quality is comparable to new but the price is significantly more affordable. “These homes are usually furnished, in good technical condition and do not require immediate additional investment — therefore they are preferred over new developments, which are more expensive and often still require the purchase of furniture and interior fittings,” Uibomäe explains. He also predicts that the price gap between resale apartments and new developments will begin to narrow, and depending on the product group, real estate price growth will remain in the range of 5–10%.
In his view, the quality and accuracy of listings will also become clearly more important next year. “Since most transactions come from the resale market, buyers pay very close attention to the condition of the property and the information provided by the seller. Sellers are increasingly aware that poorly described apartments or hidden defects can later lead to disputes or failed transactions. As a result, more attention is being paid to ensuring that listings are accurate, informative and reflect the true condition of the property.”
Bank: purchases of new apartments are increasing
According to Arko Kurtmann, Chairman of the Management Board of Coop Bank, activity in the commercial real estate market in 2026 will largely depend on how much free lending capacity banks still have for real estate financing.
“Banks finance cash-flow-generating properties, not speculative space. As long as there are vacant spaces in new office buildings, vacancy rates and rental prices in older buildings will be under greater pressure. Since a significant amount of new office space will enter the Tallinn market in 2026, vacancy rates and rental prices will remain broadly at the same level,” Kurtmann explains.
While commercial real estate is noticeably dependent on Euribor, transactions in residential real estate take place regardless of factors such as Euribor or inflation, which has also caused the outstanding volume of home loans to grow month by month.
“We see that buyer preferences have changed over the past year. Whereas previously we mainly financed the purchase of new apartments, this year many buyers have preferred so-called ‘like-new’ apartments that are 3–7 years old,” Kurtmann says. In the last quarter of 2025, however, sales of new apartments have also picked up, and the inventory of bank-financed new developments has decreased rapidly.
“For 2026, we forecast an active year in terms of transactions. Apartment price growth will be very moderate, as supply is sufficient. The average statistical price per square meter will depend on the structure of transactions — that is, whether more new or resale apartments are sold,” Kurtmann explains.
