The Rise of Euribor Has Directed Home Seekers to Tallinn's Surrounding Municipalities

Rising euribor has put home seekers in a greater dilemma than before – is a house in Tallinn's exclusive area really worth taking on a large loan burden, when half an hour's drive or train journey from the capital, one can get an equivalent house 100,000–200,000 euros cheaper.

"Statistics from the real estate portal show that home seekers are increasingly interested in real estate offered in municipalities around Tallinn, where there is functioning infrastructure and schools and kindergartens nearby. The popularity of small residential areas and towns has also been boosted by their quieter and more people-friendly living environment," noted Kinnisvara24 director Urmas Uibomäe.

However, the capital remains the first choice of home seekers, as most people work in Tallinn and theatres, cinemas, restaurants and other entertainment facilities are concentrated there. Nõmme, Kakumäe and Pirita have been considered Tallinn's best residential areas for years, which has also driven house prices there to great heights. "In the context of high euribor, many people face a dilemma as to whether a significantly larger investment in Tallinn's exclusive residential area is worth it," said Uibomäe.

If you compare, for example, two double houses of the same size built in the mid-two thousands in Kakumäe and Keila, their price differs by nearly 40%. An over 220 square meter apartment in Kakumäe costs 650,000 euros. The sea is nearby and the city center takes an average of 15 minutes by car. However, the seawater at Kakumäe beach is ice-cold for most of the summer and during rush hour, you have to sit in major traffic jams.

The head of the real estate portal points out that a similar house in Keila costs 395,000 euros and is located right next to health trails. In winter, you can start skiing from your home gate. The town has many beautiful parks and a beautiful Klooga lake, as well as a recently renovated Klooga seaside, which are 15 minutes' drive away. Nearby there are shops, kindergartens and one of Estonia's largest schools. Very good rail connections have been established with Tallinn. You can reach the city center by express train in 30 minutes, it takes about 40-45 minutes by car during rush hour. Keila's population grows every year, new apartment buildings are being built there, and the prices of their apartments are already approaching those of the capital. Looking at sales listing statistics, the asking price for houses in Keila has risen by nearly 40% over the year, and some are worth half a million or more.

Kehra, which is slightly beyond Tallinn's golden ring, has become known mainly for its paper mill. It is the administrative centre of Anija municipality, located on the banks of the Jägala river. However, Kehra, located 40 kilometers from the city center, offers all the comforts of living. You can get to Tallinn for work by train in 37 minutes, and it takes about the same time by car to the capital. If you compare a 160 square meter house built this year in Kehra with a year-old building in Pirita, the price difference between them is over 200,000 euros.

According to Uibomäe, Pirita, with its beautiful coastline, river, forest parks and interesting historical places, is undoubtedly one of Tallinn's most nature-friendly residential areas. You can drive to the city in 15 minutes, but during rush hour, you can be stuck in traffic for half an hour by car. Pirita beach has since lost its value as a swimming spot in the capital. A year-old smaller house in Pirita costs 530,000 euros and a similar dwelling in Kehra costs 319,000 euros.

A similar balance also emerges when comparing terraced houses. Terraced house units completed in the last five years in Pirita, Nõmme, Kehra or Järveküla in Rae municipality cost in the price range of 255,000-599,000 euros. In their case too, living in Pirita or Nõmme costs nearly 200,000 euros more.