The Rental Market Is Looking for Cheap and Good

Rental prices that rose approximately one-fifth last year have gone through a correction and have since stabilized.

Stabilization primarily affects Tallinn apartments with rental prices of 400-800 euros. Prices have corrected and remain at this level today. The capital's more expensive apartments, with rental rates of 1000 euros or more per month, are still under price pressure. It's true that decent prices can be obtained for some apartments even now, but then they must be special, luxurious, and have a first-class location.

Although spring and autumn are active seasons in the rental market, no significant rental price increases should be expected in the near future. On one hand, people are looking for savings opportunities in the face of high inflation, and on the other hand, cash flow management is critical for real estate investors, who are pressured by high winter utility costs and loan payments, whose interest rates have risen significantly.

Significant utility costs

The rental market is strongly influenced by energy prices, which is why apartments with higher utility costs must have rental prices that are proportionally balanced with utility bills.

Tenants clearly prefer apartments with district heating, and despite gas prices having fallen from their interim peak, it is believed that with district heating, costs are most predictable.

Looking for cheap and good

The most popular are still cheaper apartments, which is largely due to Ukrainian refugees, whose preference is for apartments priced up to 500 euros per month. However, such homes must also meet certain standards, and customers are very selective since there are many to choose from.

When renting out a home, one should look very critically at whether you yourself would want to live there. Often owners believe that some old cupboard or dresser would be suitable for a tenant, but in reality, old and worn-out furnishings reduce the value of the entire property.

Outdated rental apartments should be modernized so that from a shabby apartment, a place would emerge that a tenant would want to call home from the first glance and for which the apartment's new resident would be happy to pay a fair price.

The summer rental season is knocking on the door

In the near future, we are awaiting the peak season for apartment rentals, which is typically July and August each year when new university students start looking for homes. Those who want to choose from a larger selection of apartments should start their search early and reserve a nice living space in good time.

If rental prices that rose last year put students in a difficult situation, then this year the situation should be considerably better, as there are more offerings and rental prices are lower.

Article author: Sille Sillaste (Uus Maa Capital real estate agent)