Tartu Real Estate Market

Tartumaa real estate broker Toomas Matvejev shares his thoughts on the Tartu real estate market

I am Toomas Matvejev, one of the founders of Lumena Real Estate Agency, managing director and also a real estate broker.

I started my real estate career in 2015 at a company called Epicenter Real Estate. Today, however, I work at Lumena Real Estate Agency. Just recently this spring, Lumena Real Estate Agency turned 3 years old, and by coincidence, Lumena Real Estate Agency's birthday is on exactly the same day as my personal birthday.

My main work area is the city of Tartu and Tartumaa, but together with my team we have helped many other South Estonian real estate owners sell their properties – we are very flexible and ready to help all clients regardless of their location. This is confirmed by the fact that we have conducted very successful transactions throughout Estonia – for example in Harjumaa and also in Pärnumaa.

• HOW WOULD YOU CHARACTERIZE TODAY'S TARTUMAA REAL ESTATE MARKET? WHICH PROPERTIES AND AREAS ARE THE MOST POPULAR?

That very much depends on how you look at it. Personally, I have heard that the greatest demand is for houses and apartments in the Tähtvere area, but unfortunately real estate is sold very rarely in that region. In terms of transaction activity, Annelinn is undoubtedly the most active area, as it has the most residential space. Also, it is visible in Tartu that there is a very large shortage of larger and more exclusive apartments located in the immediate vicinity of the city center and in good or very good condition. But what sells best and fastest are 2-room apartments. I think this does not differ much from other Estonian cities either.

• IS THE DEMAND AND SUPPLY OF RENTAL SPACE IN TARTUMAA WELL BALANCED?

If we look at the current situation, demand is certainly lower than it is in the middle and end of summer, when students come to Tartu looking for living space. So currently it is a bit more difficult to find a suitable tenant for your apartment, but at the same time we have found tenants for apartments relatively quickly. Usually rental listings are not up for over 1 month. The pandemic situation in the country has certainly also affected the rental market. If you look at previous years, in the same period there have been significantly fewer rental listings on portals than there are today, and the situation changed especially drastically in spring 2020, when all short-term rental apartments were put up for long-term rent. The number of listings on portals almost doubled during that time. Nevertheless, I believe that ultimately there is an interested party for every rental apartment at a fair price.

• WHICH AREAS ARE THE MOST POPULAR IN TARTU FOR BUYING PROPERTIES FOR INVESTMENT PURPOSES AND WHICH AREAS HAVE THE HIGHEST YIELDS?

Certainly every area in Tartu has its own advantages and disadvantages. The most popular are definitely the panel buildings in the Ülejõe area. It is difficult to single out the area with the highest yield, rather it largely depends on what price it is possible to purchase an apartment at. I believe that in terms of yield, Annelinn could be the best area. If you look at which area people most like to rent in, those are Karlova, the City Center, and Ülejõe. It is easiest to find a tenant for these areas.

• HOW HAS THE CORONAVIRUS CRISIS AFFECTED THE ARRIVAL OF NEW PROJECTS ON THE MARKET?

Currently, it seems that many new projects are still moving forward and there is demand on the market. If we look at the new projects that have been put on sale in Tartu, the majority of apartments are booked within a few weeks. But what is sad is that if you look at apartment sizes, most new developments have relatively small apartments. It seems that there may be a situation in Tartu where small apartments are overproduced. Ultimately, tenants benefit from this situation, as there are many apartments on the market and landlords have to lower their prices due to market saturation. But that is my opinion and time will tell what situation we eventually end up with on the rental market.

• FINALLY, TELL US MORE ABOUT YOURSELF – WHAT HAS BEEN YOUR BEST DEAL SO FAR? WHAT ELSE ARE YOU GOOD AT BESIDES BROKER WORK?

Every deal is a success for me, but certainly the one that stands out most vividly in my memory is my first deal, where I was able to raise the price 10% higher than the original asking price thanks to good sales skills. Although over time there have been larger price increases, I believe that for every broker it is that first deal that remains most vividly in memory.

Besides broker work, I engage in my hobbies. The biggest hobby is triathlon. I am not a professional in this field, but rather a completely average enthusiast. One dream is to complete a full-distance Ironman in this sport, which I actually planned to do in 2020 in France, but due to coronavirus restrictions it was postponed to 2022.