Tallinn Real Estate Market Gets Momentum from Interest Rate Cuts: Developers Bring New Phases to Market

The Estonian real estate market is moving into a new phase, where cautious waiting is being replaced by deliberate action, according to a real estate expert. In recent months, several developers have begun re-evaluating previously shelved projects, citing growing buyer interest and a stabilizing economic environment. For example, Kaamos Kinnisvara is continuing development in Hõbemetsa on the border of Nõmme and Haabersti, where approximately 30 new A-energy class homes are being built. Completion is planned for the summer of 2026.

Ivar Vahter, a board member and development director at Kaamos Kinnisvara, says that interest in well-planned new developments is growing and the standstill is being replaced by increased demand from informed buyers. "While 2023 and 2024 brought much caution from both buyers and developers, today we see that the stability of construction prices and stabilized interest rates together make it possible to bring quality projects back to the market, which are attracting more serious interest," Vahter comments.

Market conditions favor construction

The decline in input prices in the construction sector and better availability of labor have reduced development risks, and banks' activity in financing projects has also increased.

"The recovery of the apartment market is no longer driven by speculative purchases, but by actual need to improve living conditions. Buyers are looking for a home that matches their lifestyle, where quality and energy efficiency are at modern levels," says Vahter.

The Hõbemetsa residential area is a good example of where the greenery of Nõmme meets the strong infrastructure of Haabersti, which according to Vahter is becoming an increasingly important factor in buyers' decisions.

Sales period is shortening

Real estate analysts also confirm that the market is showing slight but steady growth in demand. Sales periods, which just a year ago stretched over several quarters, are beginning to shorten, and purchase decisions are being made more consciously and quickly. A similar trend is reaching the new development segment, where high energy efficiency and a complete living environment give projects a competitive advantage.

"Certainly, there is more movement and growth in confidence to be felt," Vahter sums up the situation.

Kaamos Kinnisvara is continuing its Hõbemetsa development to be ready for completion in the summer of 2026. The first apartment sales transactions in the new apartment building being constructed at Rehe 13 have already been concluded and interest in the project remains active