Rental Apartment Prices Have Risen Up to 50 Percent in a Year
According to the statistics from the portal Kinnisvara24, the average rental price for apartments across Estonia has increased by approximately one-fifth compared to the previous year. The biggest changes can be seen in Tallinn and Tartu, where apartment seekers need to account for prices that are up to half more expensive.
According to Kinnisvara24 CEO Urmas Uibomäe, the most active period in the rental market is every year in July and August – this is when people return to the city from country homes and students starting a new academic year also search for apartments. "If last year an average apartment was rented for 499 euros, today one needs to count on an average of 604 euros for a rental apartment."
The increase in apartment prices is related to overall price increases and 23-percent inflation, but the change in rental prices varies by region and stems from demand. "The most competition and price increases can be seen in Tallinn and Tartu, where the larger universities are located. The demand from investors for rental apartments in these cities is also the highest," explained Uibomäe. "In addition to investors and students, war refugees are also looking for temporary housing this year, which is why the rental market is experiencing particularly fierce competition in terms of more affordable offerings."
Kinnisvara24 portal clients have preferred larger apartments this year, and although the average monthly rental price has increased by one-fifth, the average price increase per square meter remains below ten percent. In July of last year, the Kinnisvara24 portal had 1,293 rental listings, with an average size of 49.2 m2 and an average monthly rent of 499 euros. This July, the portal had a total of 1,318 rental listings, with an average size of 52.8 m2 and an average rental price of 604 euros per month.
In Tallinn, the average price of rental listings in July 2021 was 614 euros. Today, when searching for a rental apartment in the capital, one needs to account for a price that is one-quarter higher, or 768 euros.
The largest price increase can be seen in the university city of Tartu, where rental prices are half more expensive compared to the previous year. In July 2021, the average price of a rental apartment in Tartu was 306 euros, but this July it was already 479 euros.
According to Uibomäe, one should not, however, be frightened by the rental price increase, but should also look into the additional costs. "In addition to the general price increase, the share of new developments on the market has also grown, which have a higher rental price, but due to lower utility costs, the monthly expenses remain the same as with older apartments," he explained.
Although the number of rental listings on the Kinnisvara24 portal has increased compared to the previous year, a shortage of rental apartments can be seen across the entire market. "The growth in the number of listings primarily shows the portal's growth and confirms that more and more brokers and individuals are using the portal as their first channel," added Uibomäe.
A trend can also be seen in the portal where real estate sales listings with lower prices disappear quickly, and the same objects reappear after some time for sale or rent again at a higher price. "Against the backdrop of freed-up pension funds and fear of inflation, there is a constant search for new investment opportunities and ways to earn passive income, which is why the offerings are attracting an exceptionally sharp gaze from more eyes than usual and there is fierce competition among apartment seekers," added Uibomäe.
"Since more expensive apartments are not affordable for many and strong demand for more affordable offerings was already seen in spring, we also created a separate Facebook group where only rental listings that remain below 500 euros are collected, and in addition, apartment seekers can write their wishes there," added Uibomäe. "The group has quickly gained momentum and today is already being used by over 1,200 people."
